We are all nervous about planning for our retirement these days, and it doesn't help that there is so much conflicting information everywhere you turn for help. So which advice do you take and what can you really do to best prepare for your retirement?

The first thing is to understand yourself and where you want to be when you're ready to retire. The younger you are the harder this is because as we grow older our outlook on life really does change.

It's important to have a plan but at the same time remain flexible and adjust that plan accordingly to your changing needs as your life evolves.

Not everyone will be able to retire to a dream location. However, the one thing you must do while you are younger is start saving because the earlier you do, the less money you actually have to save in the beginning and over your lifetime. In this case, a little really does go a long way and the longer your investment horizon, the more powerful your retirement savings will be.

Here are five guidelines for developing a framework that fits your overall life and allows you to make changes along the way towards a long and happy retirement.

1 - Traditional pensions where the employer funds the account on behalf of the employee are disappearing. This was more common place for older generations but as many people who had that as a primary retirement source found out, if the company folds or is purchased then the pension becomes almost worthless. So, have more than one retirement vehicle.

2 - Diversify. The old adage not to put all your eggs in one basket is especially true for saving towards your retirement. Diversify your investments based on the length of time you have until you reach retirement age. Life-cycle funds can help you do this based on a mix of other funds that take into account the number of years until you retire and adjust the mix of investments and risks accordingly as you age.

3 - Trust your gut. If something is too complicated for you to understand then don't do it. Sometimes simple really is better. When choices are too complicated we tend to let fear dictate our decision making and either we will do something too risky or do nothing at all.

4 - If there is a matching program through your place of employment take advantage of it to at least receive the matching funds. Otherwise, you're throwing money away because you don't receive this money unless you contribute to your retirement account, usually up to a certain percentage of income.

5 - Most importantly, stay healthy, fit and happy. Wherever you land in retirement these three ingredients will enrich your retirement years and make them far less costly.

Learn more about this author, Teresa Stone.
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