Retire the Easy Way

Retirement is supposed to be about doing what you want. Do you really want to spend all your free time worrying about your investments?

Of course, if you like investing, it's easy to fill up your day poring over charts and financials, searching for the next huge winner. You can use sophisticated active trading strategies to try to eke out a few extra percentage points over the indexes. You can buy complex software that will let you see historical data back to the Great Depression and analyze new ways to make profitable trades. If that's how you want to spend your golden years, more power to you.

But if you'd rather play a round of golf than make a round-trip futures trade, you don't have to spend every minute of the rest of your life managing your money. One simple strategy can get you to a comfortable retirement and keep you there without demanding all your attention.

Keep it simple
The key to a successful financial plan is finding an asset-allocation strategy that makes you comfortable. If you're too aggressive, you'll stay awake at night worrying about whether you could lose your entire life savings. But if you stay too safe, your money won't grow enough to keep pace with rising costs, leaving you in an uncomfortable situation when it comes time to retire.

Most financial planners will tell you there's not a one-size-fits-all strategy. It depends on your goals, resources, and personality. Still, most asset-allocation strategies involve diversified portfolios, which for many investors means using mutual funds or exchange-traded funds (ETFs). In the Fool's Rule Your Retirement newsletter, you'll find three different asset-allocation strategies designed to work for investors in a variety of circumstances. Yet even with these different strategies, Rule Your Retirement advisor Robert Brokamp encourages readers to tailor their portfolios to reflect their own comfort level and risk tolerance.

Hit for singles
Greed is a constant enemy for investors. Many people find mutual funds too boring; they may provide steady returns, but you'll never hit a home run like you can with individual stocks. Sure, it's tempting to count on finding a 10-bagger stock that will set the stage for a gold-plated retirement. But if you don't have the temperament to risk it all on one or two picks -- and most people don't -- you're far better off taking the slow but steady path to success.

But staying on the straight and narrow is harder than it sounds. When your friends tell you how they nearly doubled their money in six months on aQuantive (Nasdaq: AQNT  ) , part of you will wonder why you ignored their advice and stuck to your index funds. Watching stocks like Dendreon (Nasdaq: DNDN  ) soar from $2 to $20 in just months will leave you wondering whether you'll ever be able to retire holding basic broad-market-tracking ETFs like the SPDR (AMEX: SPY  ) or Vanguard Total Market ETF (AMEX: VTI  ) . You can get discouraged, especially if others always seem to be ahead of you on the road to retirement.

Yet by staying conservative, you'll also avoid land mines that could derail your entire strategy. Take Dendreon, for example. It's easy to say you'd like to have owned it on its way up, but would you have avoided the 71% drop it suffered in just one week? Hindsight is perfect, but few have the foresight to cash in at exactly the right time on a fast-moving stock.

You'll get there
For three years now, Rule Your Retirement investors have been getting the job done. Over the past three years, the newsletter's moderate allocation portfolio has outperformed the S&P 500, with a 60% allocation to stocks. You can get all the details on Rule Your Retirement's winning portfolio, along with the three-step system to getting your retirement plan on track, absolutely free with our no-obligation, 30-day trial. (Today's a good day to try the service; our anniversary issue releases at 4 p.m. ET.)

Retirement investing doesn't have to become a second career. Simple actions will make your retirement come together. Get your retirement plan in order today, and you'll enjoy more success in the years to come.

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Fool contributor Dan Caplinger has been waiting to retire since before he started his first job. The Fool's disclosure policy is your helping hand.

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Dan Caplinger

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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