By Kris Miller

Most people who have a 401k or an IRA have little idea of where their money is invested. When asked, "Where's your retirement money?" they often respond, "at the bank" or "with my broker." No wonder so many people are financially unprepared for retirement.

The fact is if you want to be financially secure in your golden years, you must take control of your investments today. Handing over your money to a broker and hoping someone else will look out for you is a recipe for disaster. Imagine saving and investing for 40-plus years, only to find out at age 65 or 70 that you don't have enough money to retire. It's a common scenario that happens every day.

With so much planning information available, why are so many people still unprepared for retirement? Because there are certain financial-planning myths that simply won't go away. The more you believe the myths, the more of a struggle your retirement will be. Let's clear up these myths once and for all so you can take charge of your financial future and be prepared for retirement.

Myth 1: You have to put your money at risk to make a decent return.

Most 401ks and IRAs are invested in the stock market, but thats the riskiest place to put your money. You've likely heard market experts say nows a good time to invest in the stock market. Really?

A broken watch tells the right time twice a day, but that's no reason to wear one. According to experts, stocks provide an average 10 percent return annually. But this assumption dates back to the 1800s and no longer applies in the 21^st century. Today, your typical annual return on stock-market investments is closer to 5 percent.

You may also have heard, "Our economists are forecasting" Ask your broker if the firm's economists predicted the most recent recession and, if so, when? Investor Warren Buffett once said forecasters make fortunetellers look good. If you want to earn higher returns, most brokers say you have to take more risk. This must come as a surprise to Mr. Buffett, who prefers investing in boring blue chip industries.

Here's the truth: There's no reason for your money to be at risk. You can make money with safer investments such as fixed-index annuities, which are like a savings account with an insurance company. In fact, even during the Great Depression, not one person lost money with a fixed-index annuity. They're safe, have liquidity, and offer better rates than most other products. So why hasn't your broker told you about these less risky options? See Myth 2.

Myth 2: Your broker only makes money when you do.

It's nice to think that your broker cares about you and your financial future, but that's not 100 percent true. While your broker likely does want the best for you, here's what usually happens when you let him invest your money: He buys shares of stocks and mutual funds. The market can then go in one of three directions: up, down or stagnant. Wall Street can't control the market, and neither can your broker.

Here's the important point: Brokers don't make money when you do. Sure, they'd like you to make money, but they actually make their money by managing your money. They make money when the market goes down, when the market goes up and even when the market is flat. In other words, they always win. Their clients, however, only win in one of those three directions. That's why, even though you hope for the best, you often end up with a cooked goose instead of the fatted calf.

Since your broker essentially makes money by moving your money from fund to fund and buying and selling shares of stocks, why would he want you to invest in something boring like the fixed-index annuityespecially since the less risky products typically offer brokers a one-time commission and nothing more? In contrast, there are big commissions in stock-market investing. Every time your broker buys or sells stocks for you, not only does he charge you a fee (see Myth 3), he gets a commission. Knowing this, who do you think most brokers are really looking out for?

Myth 3: Maintaining a stock portfolio is very inexpensive.

Even though you may be putting money into your retirement account on a regular basis, hidden fees may be slowly draining your account. The disclosed fees are simple to find. Look at the expense ratio, which is found in the prospectus. These fees are commonly referred to as management fees.

Administration fees are in addition to the management fees and are much harder to find. At first, you may think a small fee here and a nominal fee there is no big deal. After all, how much could these administration fees possibly be? Consider the following information, taken from the U.S. Department of Labor 401k fee website.

"Assume you are an employee with 35 years until retirement and a current 401k account balance of $25,000. If returns on investments in your account over the next 35 years average 7 percent and fees and expenses reduce your average returns by 0.5 percent, your account balance will grow to $227,000 at retirement, even if there are no further contributions to your account. If fees and expenses are 1.5 percent, however, your account balance will grow to only $163,000. The 1 percent difference in fees and expenses would reduce your account balance at retirement by 28 percent."

That's a huge fee! Therefore, be sure to look and ask your broker about plan-administration fees, investment fees and individual service fees. Knowing the truth about hidden fees and taking action to avoid them can add thousands of dollars to your retirement savings.

Plan Your Future Today

Whether you plan to retire today or in 30 years, you need to take control of your retirement accounts right away. Understanding how your money is invested and making sure it's working for you in the most efficient way will give you peace of mind and future security. By dispelling the key myths of financial planning and investing a little time and energy creating your future financial plan, you can rest assured that your retirement years will be pleasurable and prosperous.

Since 1991, Kris Miller has served hundreds of individuals and families, tailoring long-term, personalized financial plans that carefully preserve their principal and maximize return. He is the author of PREtirement Planning Essential. For more information, visit www.krismillermoneymaestro.com/retirementmistakes .