Do This If You Want to Retire Anytime Soon

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For some investors, the market's plunge over the last year has actually been good news. Those in their 40s and early 50s have more than enough time to recover from their losses -- and many young investors didn't have any money to lose, so they're happy to see their favorite shares at more affordable prices.

But if you're within 10 years of retirement, you've probably felt more pain than your younger counterparts. Nevertheless, it's not too late to try to make repairs to your portfolio -- and to prepare yourself for the end of your peak-earning years.

Wrap it up
Late-career investors have already made many of the decisions that will determine the course of their financial future. If you're like most people nearing retirement, many of the attributes below probably apply to you and your situation:

• With 20 to 30 years under your belt at work, you've already accumulated a substantial amount of wealth and have a good understanding of how you're currently invested.
• You've likely seen big drops in your net worth thanks to the bear market -- and those losses are particularly annoying, given that you've saved and invested the way you thought you were supposed to over the years and are now being punished for it.
• If you're still working, you're probably in your peak-earning years. But with all the economic uncertainty going on, you can't count on that job being there forever -- or on maintaining your income as long as you might want.

Despite the fact that you're in the homestretch toward retiring, it's not too late to make changes that will get your portfolio in better shape. The following ideas can help you do what it will take to secure your financial future.

Think preservation
As you approach the end of your career, you have to face one stark reality: You've already earned more money than you're going to make over the rest of your life. As important as your investments have been throughout your career, they take on added importance as you realize that what you own is all you'll have to support you during retirement.

That's one reason why Foolish retirement expert Robert Brokamp advises those within 10 years of retirement to cut back on their allocations to stocks. In the model portfolios he provides to his Rule Your Retirement subscribers, he advises throttling down on stocks and building up a portfolio of conservative investments like bonds. In addition, you may want to start looking at options for building your own pension with annuities that MetLife (NYSE: MET) and other insurance companies offer.

But keep some risk
Note, though, that Brokamp doesn't advocate entirely getting rid of investments that some consider to be on the risky side. Small-cap stocks like Dynamic Materials (Nasdaq: BOOM) and Titanium Metals (NYSE: TIE) could well lead the economy out of recession. International stocks such as Infosys (Nasdaq: INFY) and America Movil (NYSE: AMX) provide exposure to economies that may well do better than our own in future years.

In many ways, it's riskier not having a wide range of investments than it is to focus on well-known blue-chips like Bank of America (NYSE: BAC) and General Electric (NYSE: GE) -- both of which carry risks of their own. Moreover, by keeping a diversified portfolio that includes stocks of all types, you keep the chance of seeing your portfolio rebound from its recent losses.

Max your savings
Even once you optimize your investments, nothing's better for your investments than to save more. The IRS lets anyone 50 or over save more money in 401(k) plans and IRAs, and it's worth it to take the IRS up on its offer.

But don't let even those higher limits stop you from saving more outside tax-favored accounts if you can. Unless you plan on working your whole life, those high salaries won't last forever. Make the best use of them before they disappear, and you'll put yourself in the best shape you can for retirement.

The bear market has been scary for those approaching retirement. Don't panic, make the right moves to your portfolio, and save as much as you can, and you can still have the retirement you've always wanted.

More Foolishness about healthy retirement:

• Seven more years can earn you $1 million.
• This move could save your retirement.
• Don't buy into these investment myths.