Personally, I prefer real estate.

Although everyone is having a really tough time now with property investments, retirement planing is a long term project. If you look at property values over the span of several decades and not just within the last few years, real estate always performs well.

This is not a get in get out strategy. You have to be willing to hold on and maintain the investment for a great deal of time to minimize the risk. But if you are patient it will pay off.

I recently read an article that some old hollywood star, I can't remember the name right now, had bought their mansion in Bevery Hills for $200,000 in 1954 (big bucks back then), and sold it for $13 million in this down economy. They were upset because they could have gotten $25 million a few years ago.

They were complaining about a $12.8 million dollar proffit! Just another example that real estate in the long term is a great retirement tool.

Real estate can be very good long term, but in order to be a landlord, you need to have capital set aside for repairs and vacancies. You also have to do work yourself to find tenants or pay someone to do it, for a fee. Also, if you sell property that isn't your primary residence, you need to consider the capital gains taxes in your state and from the federal government.

I know several people that own rental properties and I think it is a very solid long term investment. You just need to know it's a little more involved than most other types of investing.

Personally, I would want to be a landlord, but I don't have enough extra cash to buy property above and beyond my primary residence. I probably should have purchased a much more modest house and then purchased rental property.

I do have quite a bit set aside in a 401k, so that is my primary investment. Plus, my wife and I have a small Roth IRA that is conservatively done. When we go to retire, that is basically going to be a sweet vacation fund, as long as the 401k doesn't crash.