Joe, 35, has about 30 years to save for retirement. Like many people at this stage in life, he wants to invest mainly for growth. He thinks that's exactly what he's doing - but it's not. Let's find out why:

Joe's objective for now is to keep 70 percent of his money in stocks, 20 percent in bonds and 10 percent in cash equivalents. He has $10,000 in retirement savings and allocates $7,000 of it to stock funds, $2,000 to bond funds and $1,000 to money market funds. That sounds good so far.

However, Joe has overlooked the assets outside of his retirement plan, many of which are income-oriented. He has $3,500 in cash equivalents, such as money market deposit accounts and federally insured certificates of deposit (CDs), and $9,500 in taxable mutual funds. Joe has $6,500 of his mutual fund assets allocated to bond funds and $3,000 to stock funds. Overall, his true asset mix is 43 percent stocks, 37 percent bonds and 20 percent cash equivalents (see chart A).

That's a far cry from the 70-20-10 mix he thinks he has. And it's a much too conservative investment approach for his present situation and objectives. Joe should review all of his financial assets and rebalance his mix accordingly.

One example of a mix Joe might consider is as follows (also see chart B):

• $10,000 of retirement savings plan to stock funds,
• $6,000 of mutual fund assets to stock funds,
• $4,600 of mutual fund assets to bond funds and
• $2,400 of mutual fund assets to cash equivalents such as CDs and money market deposit accounts.

That's just one of several ways in which Joe could rebalance his assets and have the 70-20-10 mix he seeks.

Chart A

Joe's current mix

Chart B

Joe's desired mix

The specific investments don't matter as much as having the right overall mix for your objectives — a comfortable balance of risk and return potential. So when you're deciding how to invest the money in your retirement savings or pension plan, think about the other assets you own and how they are invested. You may find that your retirement savings or pension plan should be geared more toward growth (or income) than it currently is.

The above article is for general information only and is not intended to provide specific advice or recommendations for any individual. Consult your attorney, accountant, or financial or tax advisor with regard to your individual situation.

Mutual of America Life Insurance Company is a Registered Broker-Dealer.