Is it worth it to invest in multiple forms of retirement accounts. IRA's, 401k's, savings accounts, CD's? Seems better to keep it spread out in case of 1 failure or another, but on the other hand it won't produce a larger return...

I think eggs in different baskets is always going to be a common sense approach to investments of any kind - if you wish to spread the risk - ie, reduce it.

Hope that helps.

Definately you should always diversify your investments in the types of vehicles you use and the types of investments as well.

I agree, diversifying your portfolio is the best move. But do not diversify under the same company.... lol. Do an extensive research and compare the performances of these companies.

Personally I wouldn't do it any other way. I like to have things like this
spread out. The same would go for stocks and funds and... well any kind of investments, really. I never want everything in the same place.

One thing to watch is if you spread it around, you may be paying a lot more in management fees. Some accounts are more prone to this than others. You can even have more than one IRA account if you like, but you are confined to the annual investment amount as though they were one. As with any investment, the more risk you are willing to assume, the higher potential you have for growth.

As many before have stated quite effectively, diversifying your retirement investments will reduce risk, which seems to be a concern of yours.

That being said, some things to be careful about. First off, make sure that the diversification of your assets is coordinated with an asset allocation. To optimize return, you want to take the most risk *you are comfortable taking*. That is the goal of asset allocation. A second goal is to optimize and balance the types of investments, sectors, different markets, etc.

Second, you may over-diversify. The more "dispersion" you have in your asset allocation, the more you lessen the impact of any one investment on the group. Just as your investments hold steady if any single investment became worthless, on the flipside if you hit the proverbial "home run" with an investment you won't see a big upside either. Many people do this with their 401k's.

The main issue here is not the types of retirement accounts; the issue is the underlying investments. In general, an investment portfolio should be constructed based on your risk tolerance, time horizon, unique preferences, financial circumstances as well as other factors. An appropriate investment portfolio for one person may not be appropriate for another person.

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Michael A. Weiss, CFA
The Editor
The Mutual Fund Investor
http://www.mutualfundinvestor.net

I find the pie chart below to be an excellent asset allocation.
Most people would do extremely well if they mirrored same.

Unfortunately, most people have 85% or more of their retirement AT RISK in the volatile Stock Market chasing impossible sustainable earnings when no more than 15% should be there for most all NON-professional investors.

You make money in this life by NOT losing money.

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Gary Spicuzza, *SAFE
Copyright 1956
No Rights Reserved
*Self Appointed Financial Expert

I have to disagree with you Gary, completlx disagree but I am pleased that you added for non-professional investors in your statement.

Equity markets are not risky, the lack of knowledge by the majority of participants makes it risky to those individuals.

Risk is the lack of knowledge.

Earnings may be not sustainable but return on investment is. There is a big difference in that. If you chase earnings, then I agree with you, that is risky and I would not recommend anyone to have imply a strategy that chases earnings.

To chase 'anything' is never a good idea to start with and usually doomed to fail. Chasing resembles the lack of knowledge and that's when risk becomes a huge factor but that doesn't mean the the markets are risky, it is the participants lack of knowledge.

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It is not smart to play it safe but it is safe to play it smart.