If you plan to retire soon, Money magazine suggests investing the maximum amount you can in a tax-deferred account.
"Invest heavily in stocks and mutual funds to maximize growth and keep you ahead of inflation," the article says. "Consider variable annuities, but buy only low-cost ones. Don't tap tax-deferred accounts for loans or early withdrawals, both to maximize the power of compounding and to avoid penalties and taxes."
It also warns, "Don't count on seeing your living expenses fall in retirement. At first, they may even rise."
WALL STREET WATCH: "Further gains are ahead, but over the next six weeks stocks should give back some of their recent astounding advances." (McClellan Report)