1. Pay yoursef first. You make monthly payments to everything from your home mortgage to your electric bill, to your credit cards. Be sure not to neglect making payments toyourself as well, so you are building your savings for the long-term.

2. Determine your risk tolerance.Knowing how much risk you are comfortable with will help you determine the types of investments you want in your portfolio.

3. Understand your investments. Knowing the various asset classes and their risk-return relationship can put you on the right track to choosing investments that are appropriate for you.

Why should I invest for retirement?

Paying for retirement is likely to be the biggest expense you’ll ever face. By saving today, you can help make a difference in your future. The following will help you understand the importance of saving for retirement now, as well as describing some of the most popular plans and investments that will enable you to achieve your goals for retirement.

• People are living longer.
• Social Security might not be enough.
• Your expenses may not go down as much as you think.
• Your prime earning years are your best opportunity to save.

4. Invest a regular amount each month. Regularly investing the same amount in a mutual fund no matter what the markets are doing may help you build your savings and allow you to benefit from dollar-cost averaging.

5. Diversify. Make sure your portfolio investments are spread across several asset classes, industries, economic sectors, and even countries. A good way to add diversification to your portfolio is through investing in a variety of mutual funds .

Why save in a plan?

• Your contributions are automatic.
• Your contributions can be matched by employer.
• You pay less in taxes now.
• Your savings compound tax-deferred.
• You can take your savings with you.

6. Invest for the long haul. Make sure the asset mix you choose contains investments with the potential for earning inflation-beating returns.

7. Maximize tax-deferred saving. Contribute as much as possible to your employer’s plan.Your account will grow and compound much faster when you’re not paying current taxes on your contributions and earnings.

8. Use the power of time. By starting to save early, you may not have to contribute as much of your own money to reach the goals you’ve set for yourself .

9. Rebalance your portfolio. Check your asset allocation periodically and rebalance your portfolio if your investment mix has shifted .