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Diversity is key when planning for retirement

Posted On Mon, October 11, 2010

When it comes to planning for one's retirement, there is a lot at stake. It can be difficult to determine just how much money one will need during life's later years.

There are, however, a few common preparation tips people tend to overlook., a website that puts consumers in contact with financial planners, says they frequently see people neglecting to diversify their investments.

By placing one's money in a variety of retirement vehicles, the risk of losing a substantial amount of money is reduced. Placing money in an IRA and 401(k) and selecting a range of bonds and stocks can be helpful.

The website notes that as people get older, they want to have their funds in less volatile investments. "People can reduce risk by shifting assets to more conservative investments, avoiding borrowing or taking early withdrawals and minimizing fees and taxes deducted from savings," says the website. "More funds should be placed in low-cost investments and traditional and Roth retirement accounts."

Furthermore, retirees should also take into account income from annuities, pensions, and Social Security when determining how much money they'll need to set aside for retirement.

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