[K_2]

My husband, who is 32, and myself, 27, would like to save/invest some money for our retirement. We aren't able to invest a great deal but something every month at least.

I was wondering what would be the best way for us to invest our money- stocks, bonds, savings, etc?

I understand the higher the risk, the higher the return, and while that may be good for some, we know we won't have much to fall back on if we were to lose all of our savings, so we'd like to stay lower.

We also want to start college/savings funds for our children. The state has a 529 plan that looks like something we want to do, that would be for college. But for the savings for them, just regular savings account or savings bonds or something else?

We have an "Edwards Jones" here where we live, I thought about going there but don't want to seem like a complete fool because we don't know much about investing and we don't have a lot of money to invest, as I said we'd like to invest something monthly but the amount could vary.

Any tips, advice, suggestions, etc would be much appreciated.

[ebaines]

I suggest you do some research on line - go to web sites such as Fidelity or Vanguard and learn about what some of the different options for investment are. For retirement savings, I would recommend that you each set up an IRA account (I suspect you probably qualify for a Roth IRA, so look into those). Most investment houses let you set up an initial account with relatively small initial investment amounts - typically $500 or so. As for the investment choices, you definitely want a mix of stocks and bonds, especially because you are talking about long term investing. Fidelity, Vanguard and others offer mutual funds that are designed specifically for this - called life-cycle funds, where they automatically invest in a mix of stocks and bonds, including both foreign and domestic investments, with an appropriate mix depending on your age and investment time horizon. The nice thing about these life cycle funds is they run on automatic, and they allow you to have a nice diversification of investments with a relatively small investment.

As for the college 529 accounts - remember your time horizon is 18 years or more, so keep a long-term investment approach, which again means having a mix of stocks and bonds. You may want to keep some in savings accounts or CDs for safety and "peace of mind," but the return on savings accounts will not keep up with the inflation rate of college tuition. So for your investment to grow relative to tuition rates you will have to be a bit more aggressive -again a life cycle fund may be a good choice for you.