It all depends on your tolerance for risk. Now is not a great time for investors. Real Estate is flat. 'Safe' investments (Savings, CDs, Gov't Bonds) have very low returns right now. Stocks & funds have more upside and also more risk. The 2020, 2030, 2040, etc retirement funds have gotten popular. Maxing your 401k is a good move. I believe $16,500 is the max for 2011.