The Do-It-Yourself Retirement

In the best-case scenario, your employer offers a generous match for your 401(k) savings, and you have plenty of money left each month to fill up your IRA. You're also fabulously tanned, you're 20 pounds lighter, and you have more hair.

But for many, reality doesn't match that happy-go-lucky fantasy. You may not even get a retirement plan at work. That makes IRA investing virtually mandatory, and it may also get you a tax deduction unavailable to other savers.

The perks of a DIY retirement
Without a workplace plan, it's up to you to make sure some of the dollars in your paycheck find their way into a retirement account. Tax laws make the task a tiny bit easier by letting married couples earn more money before the tax deduction for IRA contributions gets snatched away.

Consider Mr. and Mrs. Workalot. Mr. Workalot gets a 401(k) with a healthy match through his company, but his equally hardworking wife does not. Both make contributions to traditional IRAs. If the couple earns more than $85,000 for 2008 and $89,000 for 2009, Mr. Workalot won't get a full deduction for his IRA contributions.

Because Mrs. Workalot doesn't have a plan at work, however, she can take a full deduction as long as the couple earns less than $159,000 for 2008 and $166,000 for 2009. The deduction gets smaller as income rises, and it disappears $10,000 above the limit.

The Workalots' neighbors, the Diligents, want to retire, too. Unfortunately, both Mr. and Mrs. Diligent work jobs without retirement plans. That means the Diligents can take full deductions for their total IRA contributions.

Confused? You can figure out how these rules might apply to your situation by using this IRS publication. Flip ahead to the charts on page 16 and the worksheet on page 19.

Deduct this
If you'd rather not take your tax deduction now, or you'd rather stick pins in your eyes than read an IRS manual, then just avoid the whole deductibility issue and save your money in a Roth IRA instead. Both spouses can contribute the full amount as long as the couple earns $159,000 or less in 2008 and $166,000 in 2009. No one gets a tax deduction for those deposits, but your money grows tax-free. You don't have to invite an IRS agent to your retirement party, either. All of the money is yours to keep.

If you're self-employed, look in the mirror and have a heart-to-heart chat about upgrading your own benefits package. Then supplement your IRA savings with retirement accounts tailored for the self-employed.

Exercise your options
You might lament that you're not among the lucky cubicle dwellers who have a retirement plan at work, but you have something they lack -- freedom. Many 401(k) plans offer employees a pretty mediocre set of investment choices. You, as an IRA investor, can invest in pretty much anything you want. An IRA is a great place to hold stocks and let tax deferral power up your returns.

If you're a little worried about dipping your toes into the stock market right now, let the Motley Fool CAPS community get you started. Take a look at some of the stocks they've given five-star ratings to -- the highest rating possible -- and then join the discussion. Some of their current picks to beat the market include:

For more help navigating your retirement:

• Get rich without help from your boss.
• Answers to your top 10 Roth questions.
• The best way to get started with IRA investing.