A random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing

401(k) and 403(b) Pension Plans.
Check whether your
employer has a pension profit-sharing plan such as a 401(k),
available from most corporate employers, or a 403(b),
available from most educational institutions. These are
perfect vehicles for saving and investing since the money gets
taken out of your salary before you even see it. Moreover,
many employers match some portion of the employee’s
contribution so that every dollar saved gets multiplied. As of
2010, as much as $16,500 per year can be contributed to
these plans, and the contributions do not count as taxable

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income. For people over fifty, some of whom may need to
play catch-up, contribution limits for 2010 are $21,500 per
year.
Self-Employed Plans.
For self-employed people, Congress
has created the Keogh plan. All self-employed individuals—
from accountants to Avon ladies, barbers to real estate
brokers, doctors to decorators—are permitted to establish
such a plan, to which they can contribute as much as 25
percent of their income, up to $49,000 annually. If you
moonlight from your regular job, you can establish a Keogh
for the income you earn on the side. The money paid into a
Keogh is deductible from taxable income, and the earnings are
not taxed until they are withdrawn. The plan is self-directed,
which means the choice of how to invest is up to you. Any
of the mutual-fund companies that I list in the Random
Walker’s Address Book can do all the necessary paperwork
for you.
Millions of taxpayers are currently missing out on what is
one of the truly good deals around. My advice is to save as
much as you can through these tax-sheltered means. Use up
any other savings you may have for current living expenses, if

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you must, so you can contribute the maximum allowed.