Plan for Your Retirement When you think about retirement, you may picture yourself enjoying hobbies, doing volunteer work or launching a second career. By planning for the next chapter of your life, your wishes can become a reality. Whether you’re right on track or even if you need to catch up, there are tools and services that can help you meet your goals and retire on your own terms.Retirement is typically one of the top financial goals you’ll be working toward. It may be the furthest out, but any good financial plan starts with calculating how much money you’ll need to live on during your retirement years, putting a strategy in place to get there, and then addressing your shorter term needs.Many financial professionals believe you’ll need approximately 80 percent of your peak pre-retirement income to maintain your current lifestyle in retirement.If your peak income is, for simplicity, let’s say $100,000, then you may need $80,000 or more each year. Multiply that annual figure by your expected years in retirement and that’s your target. Given today’s longer life expectancies, you could be nearing the $1.5–$2 million range. Don’t let those numbers scare you. Again, everyone is different. Maybe you’re accustomed to living on $40,000 per year, in which case your goal is roughly $32,000 times your retirement years. That’s a big difference.**This hypothetical example is used for illustrative purposes only and does not represent any specific investmentEnvision the Retirement You WantAnother factor in figuring out how much income you will need in retirement is envisioning how you want to spend your retirement years.Do you want to travel? Own a second home? Leave a legacy to your family, charity or alma mater? Or maybe you just want to live a simple lifestyle with the primary goal being to cover your basic expenses. Now’s your time to think through the world of possibilities, because the sooner you start planning — and saving — the better able you are to reach your retirement money and savings goal.Time Is Your Friend When Saving for RetirementSetting aside even a small amount of money each month can add up over time. One common and effective strategy is to use traditional retirement vehicles, such as an employee-sponsored 401(k) or Individual Retirement Account (IRA), and set up automatic contributions. While each of these types of retirement accounts has unique rules, all offer tax benefits that can add up over the long-term. Even if nearing retirement, it’s not too late. If you are 50 or older, “catch-up contributions” help pre-retirees stash even more money into their 401(k) or IRA than the basic contribution limits each year.How Should You Allocate Your Money?How you decide to allocate the money you've accumulated — and the goal-related products you choose — are probably the most critical factors when it comes to creating a retirement plan. As mentioned, there are IRAs for retirement goals, as well as guaranteed lifetime income products, but depending on your life stage you may want to consider other solutions as well.Diversification Helps Balance RiskDiversification can be summed up in one phrase: Don’t put all of your eggs in one basket. Regardless of what types of retirement product solutions you choose to buy, don't bet your retirement nest egg on just one. The types of products you select will vary depending on several factors, including your risk tolerance and retirement time horizon. These two factors work hand in hand. The more years you have left until retirement, the higher your risk tolerance may be.When it’s time to determine the products and financial strategy that’s best for you, you may want to consult with a financial professional who can help you map out a plan. In the meantime, make sure you have a clear vision for your goals so you’ll be better prepared to plan your financial future.While the process of diversifying your assets across multiple asset classes can help to reduce overall risk, it does not eliminate market risk altogether.