If the news about inflation and taxes sounds to the family like much ado about nothing, think again.

We did some calculations to help you see the toll these factors can take on your hard-earned money.

Assume you invest $1,000 for 30 years, earning 6 percent annually. You should have $5,744. But add in the average 3 percent annual inflation rate, and your $5,744 is worth $2,427 less, or just $3,317. Someone in the 25 percent tax bracket would have only $1,563 after both inflation and taxes.

The Tax Foundation figures Pennsylvania residents have a 10.4 percent state and local tax burden. We didn't even factor that!

As you can see, there's not much left of your investment after inflation and taxes.

So what can your family do? Here are some suggestions.

Consider living in a state that has no income taxes and look for low property taxes. States with the lowest state and local tax burdens, says The Tax Foundation, include Alaska, New Hampshire, Delaware and Tennessee.

Have your accountant review your past tax returns to see how you can reduce the income tax bite. There are some tax smart moves you can make to write off more expenses, increase deductions and reduce the tax on your investment profits.

Keep cash invested in tax-free money funds, municipal bonds and municipal bond funds. If you live in a state that taxes income, invest in your state's tax-free bonds or bond funds.

Buy and hold your investments for the long term. So when you sell, you pay only 15 percent capital gains taxes.

Put taxable income investments, such as U.S. Treasury bonds, corporate bonds and dividend-paying stocks, in tax-deferred retirement accounts or variable annuities. However, the money is apt to be taxed as ordinary income when you start taking periodic payments from these investments. You also can invest these assets in a Roth IRA. While you don't get a tax deduction for investing in a Roth, the money grows tax-free. Withdrawals also are tax-free.

Put low or no-dividend stocks or stock mutual funds in your taxable account. The reason: Stocks historically have grown at a 7 percent annual rate over the 3 percent average rate of inflation. In addition, you won't pay much income tax on stocks that pay little or no dividends. Undervalued small company stock funds and tax-managed stock funds generate little in the way of taxable income. The low-cost Vanguard Group offers a number of tax-managed mutual funds. Top-rated undervalued small company stock funds that deliver high after-tax returns, according to Morningstar Inc., include Constellation Clover Small Cap Value Fund, Mainstay Small Cap Opportunity Fund and the Royce Opportunity Fund.

Keep about 5 percent of your assets in gold or precious metals mutual funds. These investments appreciate during periods of rising inflation.

Keep investment expenses to a minimum to help boost your performance. Stick with no-load mutual funds that don't charge commissions and have below-average annual expenses. To track no-load funds and fund expenses, visit the Mutual Fund Education Alliance at www.mfea.com.