LTF,

If you invest it in stocks or mutual funds (usually a mix of stocks) you will gain some years and lose some years. It's kinda' scary in its uncertainty, but over the long haul to retirement, a good mutual fund will average 8% or better. I don't have access to more risky investments, being tied to the S&P 500, but S&P does pretty well over the long haul. The years 2001 - 2005 were pretty painful for everybody except those who were holding their 5% gov't bonds.

A cautious approach might be to invest half your contribution in bonds and half in a stock mutual fund. A balanced portfolio is usually recommended for people investing in retirement accounts. I started saving after I was 40, so I put as much as I could in "growth" funds, which are higher risk. They swing up and down more, but overall they do pretty well.

Since I'm not a financial advisor, your best bet is to spend a few bucks and hire a pro who just charges an hourly fee, not one who manages your fund and takes a commission.

Sg