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Once a year, you get a chance to do something that can make a big difference to your prospects for a secure retirement. For this year, time's running out -- you only have 26 more days to take advantage of this opportunity before you miss your chance.

Give this top priority
When it comes to your retirement, things have never been more uncertain. With government spending running out of control, you can't be certain that Social Security and Medicare will be there when you need them. Pensions in both the public and private sectors are under huge financial pressure, with many workers never getting access to pensions in the first place. And even though the stock market has rebounded sharply, many workers haven't even started to save for retirement -- let alone gathered as much money as they'll need after they retire.

Face it: If you want to retire a millionaire, it's up to you to make it happen. The easiest and best way to get started with your retirement savings is by opening an IRA. And thanks to a quirk of the calendar, you have until April 18 this year to get it done.

Can you do better?
Of course, IRAs aren't the only way to save for retirement. Some fortunate workers have employers who not only sponsor 401(k)s or other retirement plans but also add their own money to supplement your contributions, either through matching contributions or with profit-sharing.

You definitely don't want to turn down free money if it's available. But most employers will only match a limited amount of contributions -- typically 3% to 6%. With experts calling for workers to save between 10% and 15% of your earnings, that gives you plenty of extra room to open an IRA as well as contributing to your 401(k).

Why IRAs are the best
The main reason why IRAs are better than 401(k) plans, though, is that with IRAs, you get to choose how you want to invest. 401(k)s have come under fire over the years for offering crummy investment choices with fees that are too high. Often, those high-priced investments are mutual funds; you may well have no alternative available.

But with IRAs, you can invest with almost no limits:

  • If you're happy with mutual funds, you don't have to settle for whatever your employer gives you. Nearly every fund company will let you open an IRA account directly with them or through a broker.
  • Even better, you can add individual stocks to your retirement portfolio. For instance, say you're looking to buy some of the highest-yielding blue-chip dividend stocks but want to shelter dividend income from tax. Altria (NYSE: MO  ) , Merck (NYSE: MRK  ) , and Verizon (NYSE: VZ  ) would make your list, as they all yield more than 4% -- and you can own them in your IRA.
  • Like real estate? One of the most lucrative real-estate investments lately involves mortgage REITs -- companies like Annaly Capital (NYSE: NLY  ) and Chimera Investment (NYSE: CIM  ) that make money from the spreads between long- and short-term interest rates. You won't find many 401(k)s that give you any significant access to these companies, but an IRA can.
  • You can invest in alternative asset classes or even short the market in an IRA. For instance, to get precious metals exposure, you can either buy an ETF like iShares Silver Trust (NYSE: SLV  ) or take advantage of special provisions allowing you to purchase U.S. bullion coins. And thanks to exchange-traded funds, you can even get around the anti-margin provisions of IRAs to buy inverse ETFs like ProShares Short S&P 500 (NYSE: SH  ) .

In short, IRAs let you invest to your full potential. You'll need the flexibility to pick top investments if you want to take modest savings and grow them to $1 million or more by the time you retire.

Don't wait
Because of the way IRAs work, you can still make a contribution that will apply to your 2010 year, which means that you may qualify for a tax deduction on the return you'll file in less than a month. But after April 18, you're out of luck -- and there's no extension.

So start your IRA today. By starting out with a maximum $5,000 contribution -- or $6,000 if you're 50 or older -- you can take the first step toward making yourself a millionaire.

Once you've opened your IRA, track your favorite stocks and ETFs on your own personalized watchlist. Sign up now and you'll get immediate access to a new special report, "6 Stocks to Watch From David and Tom Gardner." Click here to get started -- it's all free.

Tune in every Monday and Wednesday for Dan's columns on retirement, investing, and personal finance.

Fool contributor Dan Caplinger believes in getting things done early. He owns shares of Chimera Investment and iShares Silver Trust. The Fool owns shares of Altria Group, Annaly Capital Management, and ProShares Short S&P500. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy wants you to become a millionaire.

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10/26/2016 1:44 PM
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