Ask yourself, "What will my golden years hold for me?" Is the answer a comfortable home near a golf course? Free time to spend with your grandchildren? Or even a cross-country journey or trip around the world?

Whatever your answer may be, the goals you dream about today can be yours tomorrow--if you understand what is required to fulfill them, set a course to meet the challenge of doing so, and seek solid professional assistance along the way.

Understand Why Planning is Needed

While your retirement date may still be several years in the future, and the goals you dream about today may seem even more distant, it is never too early to begin preparation. A look at factors that affect the future of all retirees can help you focus on the importance of preparing for the future now. Consider the following:

1. Increased longevity and early retirement are giving Americans more "golden years" to enjoy--and to plan for.
2. Inflation, whether high or low, affects investment dollars steadily, year-by-year reducing their "real" value and, thereby, reducing the purchasing power you will have to make your retirement dreams a reality.
3. Escalating medical costs affect both young and old, but can be devastating to retirees on a fixed income.

Determine How Much You Will Need for Your "Nest Egg"

What will you need to pursue your retirement goals? By completing the "Checklist for Retirement Planning" which follows, you can see where you are now, where you need to go to pursue your goals, and what you need to do to help manage the journey confidently.

A Checklist for Retirement Planning

Once you have identified your goals and attached a monetary value to them, you should survey your progress thus far, and see how much farther you have to go -- or where you need to go if you are just beginning. The Checklist may also be used for an annual check up on the health of your retirement planning program.

_____ Analyze your present situation, including income, expenses, assets, and liabilities. (If you keep a regular budget and expense records, this is where the time you have invested in the past can really pay off -- the information for your analysis will be right at your fingertips!)

_____ Find out how much you can expect to receive from Social Security, veteran benefits, and pension plans.

_____ Estimate how much you should receive from interest earned on savings, investments, and life insurance, as well as from real estate rentals.

_____ Review your life, health, and disability insurance policies to see whether they meet your present and future needs.

_____ Try to pay off significantly large bills now to avoid facing them when you retire.

_____ Determine which of your expenses are likely to decrease after you retire and which are likely to increase.

_____ Set your monthly and annual financial retirement goals.

_____ Determine the amount you must begin setting aside monthly and yearly to close the gap (shortfall) between your retirement income goals and your potential retirement income.

_____ Stick to your plan and look forward to a comfortable retirement!

Explore Basic Sources of Retirement Income

Because you are working now, you may be unable to imagine how you would live without the annual income from your job, career, or business. Perhaps you have some investments, but wonder how they could produce enough earnings to replace your employment income without depleting principal.

You will most likely be able to count on some Social Security retirement benefits, but remember: The more you earn now, the smaller the percentage of your income that will be replaced by Social Security after retirement.

You may also be able to count on some Veterans Benefits, but they may only be enough to supplement other income sources.

You may already be enrolled in an Employer-Sponsored Pension Plan, such as a 401(k) or a Simplified Employee Pension (SEP), which offer you tax-deferred, regular savings. If you are affected by current trends toward an increase in job-switching and movement away from multi-year career paths within one organization, however, you may not realize the full benefits of an employer-sponsored retirement plan.

The reality is that you will probably need a personal investment plan for funding your retirement.

Make Investments Prudently

Once you realize you need an investment plan and have set your retirement funding goals, the process of choosing funding vehicles for your retirement is a challenging experience. To determine the plan appropriate for your personal needs, you must consider the following:

The Time Remaining to Build Your "Nest Egg." The number of years between now and when you retire will affect your choice of investments. Consider investments designed for growth, income, or a combination of both.

Your Investment Personality. Understanding this factor is a critical, but often overlooked, ingredient in your financial planning. Insight into your risk tolerance will help allow you to choose the investment vehicles with which you will be comfortable and through which you can pursue your retirement funding goals.

Your Projected Retirement Needs. The determinations you made previously will affect how much you need to invest to reach full funding of your goals.

Look at Investment Options

As you study the variety of retirement funding vehicles available look for: Current Tax-Deductibility of Contributions, available primarily through Individual Retirement Accounts, (IRAs) and Tax-Deferred Earnings, which numerous retirement funding plans offer.

The Individual Retirement Account (IRA) is the first tax-deferred savings plan most people turn to. Depending on your income and participation in an employer-sponsored retirement plan, you may take a current income tax deduction for your IRA contribution up to specific Internal Revenue Code (IRC) limits. Even if you do not qualify for the deduction, it may still be a good idea to make a nondeductible contribution, because the funds will enjoy tax-deferred compounding.

Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax.

Annuities can offer some excellent advantages. They may be purchased for a single lump sum, for periodic fixed premiums, or for variable premiums at irregular intervals. The earnings on the annuity grow tax-deferred until some future time, usually your retirement date. Annuities also offer the choice between accepting investment risk or having the assurance of a fixed-return investment. The former is a variable annuity; the latter is a traditional fixed annuity. There are many payout alternatives. You can either take one lump sum, or "annuitize," that is, collect monthly payments that will continue over a fixed period or for the rest of your life (and perhaps your spouse's life, as well).

Fixed and Variable annuities are suitable for long-term investing, such as retirement investing. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. Guarantees are based on the claims paying ability of the issuing company. Withdrawals made prior to age 59 ½ are subject to a 10% IRS penalty tax and surrender charges may apply. Variable annuities are subject to market risk and may lose value.

Mutual funds are an excellent way to take advantage of the experience and investment acumen of professional portfolio managers. In addition to spreading risk among a variety of company stocks, you can implement the dollar cost averaging method of investment. This method, through allowing you to deposit modest amounts on a regular basis, can create a favorable cost basis over a long period of time and thereby potentially increase your returns. In addition to common stock funds, mutual fund investments can be made to money market accounts and tax-exempt bond funds.

Investing in mutual funds involves risk, including possible loss of principal. The funds value will fluctuate with market conditions and may not achieve its investment objective. Upon redemption, the value of fund shares may be worth more or less than their original cost.

Life insurance provides benefits, in the event of your death, for your spouse and dependent family members. It can also help fulfill your savings objective. By using cash value life insurance, you have the advantage of tax-deferred growth and a supplemental source of income during your retirement years.

Please keep in mind that insurance companies alone determine insurability and some people may be deemed uninsurable because of health reasons, occupation, and lifestyle choices. All guarantees and benefits of the insurance policy are subject to the claims-paying ability of the issuing insurance company. They are not backed by the broker-dealer and/or insurance agency selling the policy, or any affiliates of those entities other than the issuing company affiliates, and none makes any representations or guarantees regarding the claims-paying ability of the issuer.

Real Estate, while possibly higher in risk than other options, is another vehicle to consider. You may seek personally-owned real estate that will appreciate over the years until sold to help fund your retirement, or which you retain as it provides rental income throughout your retirement years. Or, you may find Real Estate Investment Trusts (REITs) provide the growth and income you seek, with slightly more security.

Non-traded Real Estate Investment Trusts (REITs) invest in commercial real estate or real estate related debt, but unlike exchange-traded REITs are not listed on a national securities exchange. Non-traded REITs differ from exchange-traded products with similar strategies, and can carry significant risk that should be understood prior to investing. Significant risks include, but are not limited to: sector concentration, geographic, illiquidity, interest rate, change in governmental, tax, real estate, and zoning laws, and debt. Alternative investments, including REITS, may not be suitable for all investors, and the strategies employed in the management of alternative investments may accelerate the velocity of potential loss

Speak with A Financial Professional

As you plan and work toward your retirement funding objectives, watch for signs along the way that may make your journey easier. Heed tips from specialists in the field of retirement funding, and work with your financial professional to develop the plan that is suitable for you.