Q: I‘m 38 and my wife is 36. We both participate in employer-sponsored retirement plans, but we don’t want to depend entirely on that retirement income when we each retire at age 65. Any suggestions? —Kevin

A: While there is more than one way to accumulate money, one sure way to increase your retirement income is to invest in a traditional Individual Retirement Account (IRA).

Even though both you and your wife are in an employer-sponsored retirement plan, you can still invest in an IRA. The amount you can contribute is limited to $3000 each in 2004, and you still have time–until April 15, 2005–to invest. The contributions to your IRA can be invested in a variety of things, including, of course, mutual funds with objectives ranging from the most aggressive to the most conservative (You may want to consult an investment advisor from a stockbrokerage firm if necessary). Given a moderate investment plan with an assumed return of 6% per year over 27 years until you retire, you may find yourself with $309,651 of extra savings when you reach 65. This number comes from one of the many calculation services you will find in Google if you enter "IRA eligibility." Try it. You’ll be amazed how steady investment over a term of years builds up in a tax-deferred investment vehicle. Since your wife’s two years younger, she will have a little more when she retires at 65.

You can open an IRA account at most financial institutions. Because you and your wife both have 401(k) plans, the money you put in is pretax if your adjusted gross income is less than $70,000, and the earnings are tax-deferred until you begin taking them out after retirement. If your combined income is more than $70,000, your contributions are after-tax money. Of course, as I have said before, there are a number of tax-deferred investments available under the Internal Revenue Code, more than I have space for here. One in particular you might consider is a Roth IRA. The rules permit you to have both a traditional IRA and a Roth IRA. If questions come up, I will discuss the difference between these two kinds of IRA in a future column.