The easiest and smartest way to guarantee a secure, comfortable retirement is to take part in your company's 401(k) retirement plan.

If that's not available to you, an individual retirement account or IRA is the next best thing.

The concept is simple: Put as much as $5,000 a year in your IRA ($6,000 if you're 50 or over). Invest that money in anything from CDs to stocks. Then sit back and watch your savings grow tax-free until you retire. Or, with the best kind of IRA, watch your earnings grow tax-free forever.

Just look at how school teacher Kim Gray is using an IRA to save for her retirement. You can do it, too.

Our six simple rules for creating a successful IRA will not only help you get started, they'll help you boost your contributions, invest wisely and make the most of your retirement savings over the years.

Rule 1. Go with a Roth IRA.

There are many different types of IRAs, but for the great majority of savers, a Roth IRA is the best choice.

The contributions you make to a Roth IRA cannot be deducted from your income taxes, as they can be for other types of IRAs. But when you retire, none of your withdrawals are taxed, as they are for other types of IRAs.

Deducting IRA contributions from your earnings won't save most families very much -- about $350 for a family of four making the national median income of $42,300 a year and contributing $2,400 to a traditional IRA.

That advantage is more than offset by avoiding all taxes on the interest, dividends and capital gains you'll earn over the years. This will grow to become the majority of the money in your account.

Let's say you put $1,000 a year into a Roth IRA that earns an average of 8% a year, a reasonable return if you're invested in stocks and bonds. After 20 years your retirement account will be worth about $50,000 -- $20,000 in contributions and $30,000 that your savings earned for you.

Roth IRAs have another huge advantage: Your contributions can be withdrawn, penalty-free, anytime you need the money. Other IRAs charge a 10% penalty if you withdraw contributions before turning 59 1/2. (And you may have to pay income taxes on the withdrawals.)

If you're like most of us, and don't have a lot of extra money left at the end of the month, this kind of IRA can be your primary way to save. Even if you put every nickel into a Roth account, it's always available if you run into a financial emergency.

You can qualify for a Roth IRA as long as you made less than $95,000 last year -- $150,000 if you're married and file a joint tax return.

Rule 2. Sign up with a good investment company.

Banks, stock brokers and mutual fund companies all offer IRAs and you can move your account around if you're not satisfied with the service or returns you get.

But your retirement account won't grow fast enough if you open your IRA at a bank and put all your money into certificates of deposit or money market accounts. Being too conservative is one of the biggest mistakes consumers make with their retirement accounts.

Your only hope of building a substantial nest egg is to invest in stocks and bonds. The best way to do that is through a mutual fund that pools the savings of tens of thousands of employees to buy a broad range of stocks, bonds or both.

That's good, especially if you have little or no experience investing in stocks and bonds.

"A mutual fund gives you instant diversification," says Charles Simon, a certified financial planner with Taconic Advisors Inc. of Fishkill, N.Y. "If you purchase stock independently in one company, you have one CEO working for you... Think of the headlines: 'CEOs get thrown in jail.' What if I pick the wrong CEO?"

You also want to put your money into mutual funds that charge reasonable fees and don't take a big whack out of your profits, making it harder to save and build a substantial balance.

If you have:

• At least $3,000 to invest, The Vanguard Group is a good choice. That's the minimum you must transfer to establish a Roth IRA at Vanguard, a major money management company known for its low fees.
• Less than $3,000 -- even if you have no money at all -- enroll at Fidelity Investments. You can avoid the $2,500 initial investment on a Roth IRA by signing up for "automatic investments" for a minimum of $200 a month.

Having another $40 or $50 a week taken out of your paycheck may hurt a little. But remember, you're not spending it, you're saving it.

It will be there for you.

Rule 3. Choose the right investment.

Both Fidelity and Vanguard offer lifecycle or target funds. Ask them to put your money in the one designed for the approximate year you plan to retire.

The professional managers running these funds take greater risks with your money when you're young, buying a mix of stocks and bonds with the most potential to increase in price and boost the value of your account. Of course those kinds of investments are the most likely to tumble if the market falls. But there's plenty of time for the market and your retirement savings to rebound.

As you get older, lifecycle funds adjust their mix of stocks and bonds to take fewer risks and ensure your money is there when you retire. Your account may not grow as fast, but it won't be as susceptible to downturns in the stock market, either.

According to a survey conducted by Burgess + Associates for John Hancock, people who contributed to a John Hancock Target-risk Lifestyle Fund from 2000 to 2004 experienced superior performance compared to those who selected their own investment options.

Over 91% of investors who picked their own funds would have experienced better performance if they had invested their money in a single lifestyle fund.

Rule 4. Automate, and gradually increase, your contributions.

Every year you should try to add as much to your IRA as the government allows -- $5,000 if you're under 50 and $6,000 if you're 50 or older.

If you enrolled with Vanguard, you're at least three-quarters of the way toward that goal. Signing up for its automatic investment program, which transfers money from your checking account to your IRA each month, at no cost to you, ensures your retirement fund will keep growing.

If you signed on with Fidelity, your $200 minimum monthly contribution will total $2,400 a year. Try to boost that by $5 or $10 a month -- or at least once a quarter -- until you're depositing enough to reach the federal maximum each year.

Will that be enough? A growing number of experts say you've got to save at least 10% of your income, over a significant number of years, to secure a comfortable retirement, especially if your retirement plan and Social Security are going to be your only sources of income.

Rule 5. Watch but don't touch.

Mutual funds are long-term investments that will weather storms on the financial front if you just let them be.

In other words: be patient.

Don't calculate your fund's value every day, every week or even every month. Only look at your IRA, and how your mutual funds in it are doing, every quarter when you receive the statement.

Revel in the gains and don't panic over the losses. If it's down, let it be. Every fund goes down and rebounds when you're in it for the long haul.

Reacting to a down quarter, or two, by switching to a different fund will, most of the time, be counterproductive. Chances are you'll time the market incorrectly. You'll chase yesterday's winners.

"Look, but don't touch," warns Simon. "I find that being a cook, the best baked chicken is when I don't open the oven door at all. ... Let that portfolio bake in the oven, so to speak."

The key to any successful retirement savings account is to leave it alone.

Rule 6. Avoid early withdrawals if you possibly can.

While your money is always available, keep withdrawals to a minimum.

Why? Because those funds are no longer working for your retirement.

Plus, a withdrawal is not a loan and cannot be paid back. You can only contribute the federally mandated maximum each year -- not the maximum plus what you may have withdrawn.

Of course you can withdraw part or all of your contributions without penalty.

But exhaust your contributions and start taking out investment income before you turn 59 1/2 and the government will sock you with a 10% penalty and you'll have to pay income taxes on that money.

"It's a heavy cost," says Russell Wild, investment advisor and author of "Exchange-Traded Funds for Dummies," of IRA withdrawals. "If there's any other way of doing it ... I'd advise taking the alternate route."

There are only two exceptions that allow you to avoid penalties and taxes for early withdrawals of interest income:

• You become disabled.
• You're buying your first home. Then you can withdraw up to $10,000 for a down payment.

The penalty is waived, but the withdrawal is taxed, for distributions made from your investment earnings for the following reasons:

• You need to pay medical expenses that exceed 7.5% of your adjusted gross income.
• You become unemployed and need to pay medical insurance premiums.
• You need to pay for higher education for yourself or eligible family members.
• You owe the IRS money.

By Darci Smith

Interest.com Contributing Editor

Have a question about your finances? Ask us at editors@interest.com