retirement tipsPlanning for retirement is overwhelming, and figuring out how to manage your retirement investments can be the most daunting part of it all.

It used to be that companies offered full pensions and that you could get by on Social Security once you took the leap into retirement. Unfortunately, those days are gone and it’s up to you to save for your golden years.

The cost of living is higher, and with continued advances in healthcare, people’s lives are longer than ever before. Make sure that you can enjoy your retirement without financial stress by building a solid retirement portfolio now.

Here are four tips to help you get started:

Tip 1: Identify your retirement goals and make a retirement plan.

Before you can plan for retirement, you need to know what you want to do with your time. Will you travel a lot? Take up a new hobby? Spoil your grandkids? Knowing this will lay the blueprint for how you invest.

Once you know and understand your objectives, begin your planning by identifying your net worth—the total value of your assets, minus your debts. From here, you can figure out how much you must contribute to your retirement accounts in order to attain your set retirement goal. You will likely need to create a budget and pay off your larger debts to prepare for leaving the workforce.

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Tip 2: Use retirement programs, and consistently contribute to them. You should be taking advantage of retirement plans offered through your employer. Contribute as much as you can to your 401(k), especially if your employer will match your contributions. Consult a financial planner or your employer’s HR department for advice on how to adjust your contributions.

Another option is an IRA. This is a popular choice for individuals who are self-employed or those who work for smaller companies without 401(k) plans. Get in the habit of contributing consistently to see your account grow. As your income increases, put more money into your 401(k) or IRA.

Tip 3: Diversify your investments for retirement. The type of investments you have will depend on your age. At a young age, your investments may be more in stocks because you can take greater risks. As you get older, however, you should have a higher percentage of secure investments such as Treasury bills and bonds. These pay out less than stocks, but they are lower-risk investments and can be good options as you near retirement.

Be sure to consult a financial planner if you have questions. You should never invest in something that you do not understand.

Tip 4: Diversify within your retirement investments. Different stocks lead the market at different times. Recently, for example, large and growing companies did not pay out as well, and smaller ones are now showing large returns.

Because one cannot predict when these shifts will happen, it’s a good idea to invest in large companies as well as smaller and mid-sized businesses. Also consider a small percentage of foreign stocks if they are available in your retirement plan.

Bonds should also be from a broad spectrum. Look into a total bond market index fund or add on a small amount of high-yield bonds or foreign bonds for additional protection from inflation.

Jeff Rose is a Certified Financial Planner and Iraqi combat veteran. He blogs at Good Financial Cents, Soldier of Finance and Life Insurance By Jeff.