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Act Now to Save Your Retirement

Let's talk disconnects.

Approximately 75% of Baby Boomers expect they will be happier after they retire, yet 40% aren't sure they'll have enough money to live comfortably when they get there -- and a quarter of Boomers doubt they'll be able to retire at all.

How's your retirement plan looking now? Have you saved enough?

According to a recent study of the Baby Boom generation conducted by Del Webb, the active adult division of Pulte Homes, there's a major disconnect between Americans' expected and realized retirements.

Reality check
Here's what you can do today to make sure your retirement is the one you've worked so hard to achieve.

First, save early, save often, and save as much as you can. A common piece of Foolish wisdom around here is that it's never too late to start. If your employer offers a 401(k), that's a great way to start. Or maybe you're more of the money-under-the-mattress type. Whatever the method, just get started today.

Once you've started saving -- or if you're well on your way already -- determine when you'd like to retire and what you'll need when you get there. Then, assess how much risk you can stomach along the way. More risk-tolerant investors who are approaching retirement might consider plopping their money in a mutual fund with some equity holdings. Robert Brokamp, who heads up The Motley Fool's Rule Your Retirement service, believes large-cap stocks may be the most undervalued class and offer the best downside protection in the event of an economic slump.

Recently, he profiled Oakmark Select (OAKLX) -- a mutual fund with large-cap holdings such as McDonald's (NYSE: MCD  ) , Washington Mutual (NYSE: WM  ) , and Xerox (NYSE: XRX  ) -- and provided guidance on where it belongs in a pre-retiree's portfolio. Remember, as your retirement approaches, you want to reduce your exposure to higher-risk investments (stocks) and allocate more of your holdings to safer investments such as bonds.

You want me to do what?
If you're not really the do-it-yourself type, perhaps a target retirement fund -- a mix of stocks and bonds -- is right for you. Here's how it works: You invest your retirement savings in the fund closest to your desired retirement date, and the fund manager provides a suitable asset allocation and gradually ratchets down the percentage of stocks as the retirement date nears.

At retirement, you can still follow a one-fund strategy by switching to a balanced fund. Examples include Fidelity Balanced (FBALX) -- with treasury notes held alongside large caps such as AT&T (NYSE: T  ) and Bank of America (NYSE: BAC  ) -- and Vanguard Balanced (VBINX), which is anchored by blue chips such as Johnson & Johnson (NYSE: JNJ  ) .

Connecting the dots
Perhaps you scoff at all this. After all, your retirement plan is rock-solid and you know your golden years will be everything you imagined, right?

But if you need help erasing the disconnects between planning for retirement and being able to enjoy it when you get there, let Robert and his Rule Your Retirement team help. A 30-day free trial grants you access to all of the retirement resources, including the DirectAdvice Planning Tool, which will definitively answer whether you're saving enough to have the retirement of your dreams.

So take a peek today. Your happiness may just depend on it.

Foolish editor Jill Ralph owns shares of Johnson & Johnson. Washington Mutual, Bank of America, and Johnson & Johnson are Motley Fool Income Investor recommendations. The Fool has a disclosure policy.

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