In my last post, I explained why your financial time horizon may be longer than you think, since you may be investing well into your 90s. The discussion was in the context of retirement, but in response to the article, reader kk brought up some excellent points, which I'll summarize thusly:

What if you scrimp and save your whole life and then die in your 50s or 60s (as happened to kk's parents)? Plus, retirement isn't the only financial goal, especially since "retirement" will mean different things to different people.

These are all very important ponderables. In fact, even though I'm the retirement-planning guy at The Motley Fool, I have a confession to make: I don't plan to retire. I think I would be like many of the ex-retirees I've met through the years; I'd find unlimited free time fun for a while, but after a while, I'd get kinda bored.

A couple of weeks ago, I spoke to a group of elementary-school teachers about their 403(b) plan (the 401(k) equivalent for non-profit employers, in case you didn't know). Like most investors, they were a bit shell-shocked over what's happened over the past 20 months or so.

Many asked whether they should be contributing to their retirement accounts at all, given that the S&P 500 is still down approximately 40% from its October 2007 high, even after the rally we've seen since early March. It's understandable. By some metrics, the past decade has been even worse than what happened during the Great Depression.

My answer was, yes, you should still contribute to your retirement accounts. The tax breaks are just too good to pass up. Money you contribute to a traditional 401(k) or 403(b) reduces your taxable income, so it's essentially a tax deduction. Plus, you don't pay taxes on any interest, dividends, or gains until you withdraw the money in retirement. That's known as tax-deferred growth, and ends up providing more money in retirement.

We interrupt this regularly cheerful website to bring you some unpleasant news: You're not going to live forever. And, just to pile on the unpleasantness, you might become incapacitated before you join that Great Tax Shelter in the Sky.

I know, this isn't fun to think about. But what's even worse is not thinking about it at all, which could leave your family trying to sort through all your affairs at a time of turmoil and grief.

We're talking about estate planning, something many think is just for “rich” people — but it's not. Everyone should take the following 10 steps to get their legal ducks in a row.

Want tax-free investment growth? Want more control over your retirement savings? Want to leave a bigger inheritance? If so, you should consider contributing to or converting existing retirement savings to a Roth IRA.

For Not-Yet-Retirees

The biggest difference between a Roth IRA and a traditional IRA is the tax treatment of contributions and withdrawals. With the Roth, contributions aren't tax-deductible, but withdrawals are tax-free (as long as you follow the rules). For the traditional IRA, contributions might be deductible; investments grow tax-deferred, but withdrawals are taxed as ordinary income — the highest rate possible.

To decide which is best for you, start by determining if you'll be able to deduct contributions to a traditional IRA. If you're not covered by a plan at work, a contribution to a traditional IRA is fully deductible. If you are covered, then deductibility begins to phase out at an adjusted gross income (AGI) of $55,000 for single filers ($89,000 for married couples) and is gone completely at an AGI of $65,000 ($109,000). Contributing to the Roth is then a no-brainer, assuming you're eligible (see fact sheet below). Continue reading...

Imagine it's 30 April 1989. You just came into a hundred grand. You plan on investing this money for the next 20 years. Where do you put it?

Here are four options. No need to look them up on Morningstar (in fact, that would be cheating for today's exercise). Just glance at them and choose which of the four you think would have been the best place for your money over the past two decades.

• Fidelity International Discovery (FIGRX): Invests in larger companies headquartered outside of the U.S., mostly in developed countries.
• Fidelity Real Estate Investment (FRESX): Invests in real estate investment trusts (REITs), real estate operating companies (REOCs), and small pigs (RUNTs). Just kidding on that last one.
• Vanguard 500 (VFINX): An index fund that seeks to mimic the performance of the S&P 500 index of generally large U.S. stocks.
• Vanguard Small-Cap Index Fund (NAESX): An index fund that seeks to mimic the performance of the MSCI U.S. Small Cap 1750 Index of small to middle-sized U.S. stocks.

Go ahead and choose one, and just one. Where would you have committed your money for the past 20 years? Got one? Great. Now, let's see how they each performed since 30 April 1989, and how much your $100,000 would be worth today.

From what I can tell, there were no drugs, no free love, and just a little rock-n-roll. But the “Woodstock for Capitalists,” as the Berkshire Hathaway annual meeting is known, offered its own ways to expand the mind. This past weekend, I was joined by 35,000 of my fellow shareholders — a record crowd — in Omaha, Nebraska, to soak up the wisdom of Berkshire's chairman, Warren Buffett, and co-chairman, Charlie Munger. They didn't disappoint. Despite their ages (Buffett is 78 and Munger is 85) and recent performance (Berkshire's stock was down 31.8% in 2008), the two multi-billionaires had plenty to say, which means there was plenty to learn.

I attended the six-hour meeting on Saturday and the two-hour press conference on Sunday, so it would be difficult to boil it all down to just three lessons. But I'll give it a try anyhow. (Keep in mind, however, that no recording devices are permitted in these events, so when I quote Buffett or Munger, it's a close approximation of what they said, based on how fast I could type as they talked. And that goes for any other “transcript” of the Berkshire meeting you read.)

Lesson One: Everyone Suffered Last Year

Did your portfolio plummet in 2008? Don't feel bad. Most everyone's did, including those managed by some of the greatest investors in the world. Berkshire Hathaway posted its steepest decline in book value ever. And the people in line to succeed Buffett and Munger (when they eventually join the Great Holding Company in the Sky) reportedly didn't do so hot, either. Not that we know who the potential heirs to the thrones are; Buffett has people in mind, but he's not naming names.

But