Like it or not, when it comes to planning our retirement, today we are going to have to rely primarily on ourselves. Unless you work in the public sector, pensions are fast becoming a thing of the past. Even profitable corporations like IBM and Verizon are cutting back on their pension plans.

Can you count on Social Security? Unfortunately, no. We are living longer and retiring in greater numbers than when the retirement age was set in the 1930s. By its own projections, the Social Security Administration faces trust fund depletion by 2042. It wouldn't mean bankruptcy; but unless Social Security is restructured, as of that year, payouts would be cut 30%.

Today's retirees are watching their health benefits continue to ebb. In a USA Today survey of more than 400 corporations, 10% dropped future funding of retirees, and 20% more planned to do so. Many firms like Lucent Technology are forcing their retirees to pay more for fewer benefits.

Who knows what additional changes will take place between now and the day you retire. What do you need to safely put aside? The best we can give is an estimate.

Begin by calculating how much you spent last year. Now dig out that annual report you received with your projected Social Security yield. Subtract that from your budget, along with any pension. Will your mortgage be paid off by the time you retire? If it is, discount your budget by the same amount. Now add in your true health care costs, less your employer's contribution. If you are lucky this will be offset by Medicare when you reach 65, but we're building in a cushion. You can adjust your figures later.

Maybe you envision your retirement as a 20-year vacation, where your money is safe and secure, and your interest becomes your income. Let's take a look at the most simplistic invest and forget strategy. Perhaps the safest investments on the planet are 30-year U.S. Treasury bonds, which currently pay around 4.5%.

In choosing this as an investment vehicle for your retirement years, you will need a lot of coin to generate just a $1,000 a week in today's dollars. Just to reach this figure, you will need nearly $1.2 million saved before you run down to your local investment house to buy them.

Now consider inflation. Let's use the past 30 years as a guide for predicting what the inflation rate will be 30 years from now. If you're still shooting for $1000 a week, at the end of a thirty year period, that money will be worth $275 in today's dollars. If you still need the purchasing power of $1000 a week, to offset inflation, you'll most likely have to sell off your principal, resulting in less than 30 worry-free years.

Different investments offer different rates of return. While investing in bonds offers a secure rate of return, for many this will not meet their projected financial needs. Over the past thirty years, an investment in a Standard & Poor's 500 mutual fund through lows and highs would have returned about 12% a year.

While we cannot predict the future, one thing is certain. The best time to plan for your retirement is now. Also, regardless of your investment strategy, constant monitoring and work will be required to ensure that when you want to call it quits, you will have the funds necessary to allow you to enjoy your retirement years.

Real Estate as an Investment Vehicle

Real Estate has offered tremendous returns in the last few years. Even with talk of a possible bubble in real estate prices, real estate values have traditionally increased at a rate higher than inflation. In the book The Millionaire Real Estate Investor, Gary Keller tells us that from 1972 to 2002, real estate increased at a rate 6.1% compared to inflation at 4.2%.

While these statistics are encouraging, they don't tell the complete story because rarely does someone pay cash for a home. Because real estate purchases are primarily financed with a mortgage, the real rate of return has to be compared to the amount invested in the form of a down payment. The leverage gained through this can allow for real returns against the amount invested of about 12% over a fifteen year period.

If the investment property is rented to tenants, there are additional financial benefits involved. To begin with, the rent obtained may be applied towards paying off the mortgage debt. This enables an owner's equity to increase not only through appreciation but also through reduction of principal on the mortgage. The leverage gained through this can allow for real returns against the amount invested of nearly 19% over a ten year period. This also doesn't account for money gained through increasing rent payments. If the increases in rent are applied towards reducing the amount of the mortgage, the returns can be even higher.

A simple example of this can be seen from purchasing a home for $150,000 and putting 20% down. In ten years, the value of the home appreciating at a rate 6.1% will increase to just over $271,000. The balance on a $120,000 mortgage in ten years will have declined to $101,731, yielding equity of $169,441.

While other factors have to be taken into consideration, it is easy to see that regardless of the "market", real estate can yield some pretty attractive returns and should be considered as an investment alternative.

If you have questions regarding making real estate a part of your retirement planning, call your mortgage or real estate professional for additional information on how you can accomplish this.

So what additional steps can you take to ensure that your retirement years are golden ones?

Begin Saving for Retirement as Early as You Can

Let's say that at the age of thirty, you begin making the maximum allowed contribution to your IRA (Individual Retirement Account) of $76.92 a week. If your return only reaches 9.26%, thanks to compound interest, you'll have more than a million dollars saved by the time you reach 65. At the same rates, if you were to start at age 50, you'll have $131,000 put aside. Something is still better than nothing, so no matter how old you are, the time to start saving is today. The best way to begin is to put aside a fixed percentage of your gross paycheck. 10% is a healthy start.

Create a Retirement Plan

Figure out how much you need and then keep track of your progress, making adjustments as you go. Use a realistic annual percentage rate for your return to estimate how much you need to put aside for the retirement income you want.

Here's one handy retirement calculator: CNNMoney.com

Be sure to take full advantage of every program available to you, such as employee 401(k)s, IRAs, and Keogh plans. The more buckets you fill, the bigger your nest egg will be.

A certified financial planner can suggest a mix of stocks, bonds, real estate and other investments that can balance stability and prudent risks.

Watch Your Tax Liability When You Start to Cash in

Avoid drawing down your tax-deferred accounts to the point where your tax liability is equal to what you paid during your working days. Utilize careful planning to minimize your exposure to taxes.

Be resourceful

If the money isn't there, you might have to delay retirement a few years. Consider taking out a reverse mortgage, if you own real estate and your equity has increased substantially. You may also want to think about relocating to an area with lower living expenses. Annuities could potentially help to bridge the gap as well. A U.S. Government guide to annuities can be found at the website for the U.S. Securities and Exchange Commission.

Approach the task with passion

Retirement is a time of life to anticipate with enthusiasm. Being in charge of your own time, with money in the bank, is a wonderful reward for a career of hard work.