There are many financial professionals who will, for a fee, help you navigate your way to and through retirement. But using a financial advisor isn't mandatory. If you can't afford, don't trust, or otherwise would prefer not to use an advisor, managing your own retirement is always an option. You just have to map out a sensible plan and be willing to follow it. Here are some of the basics of a do-it-yourself strategy.

Key Takeaways

  • You don't necessarily need a financial pro to help you plan for retirement.
  • If you don't already have a basic understanding of investing, take some time to learn about stocks, mutual funds, and other places to put your retirement savings.
  • As you get closer to retirement, you'll want to read up on withdrawal strategies that can help you maximize your income and minimize your taxes.

Start Well Before Retirement

If you are serious about taking retirement into your own hands, start as early as possible by adopting one simple habit: Pay yourself first. Figure out a weekly or monthly amount of money that you can set aside for the future. Retirement plans like 401(k)s, which take money automatically out of your paycheck, make that almost effortless.

If you don't have a 401(k), you can sign up for regular automatic withdrawals that will come out of your bank account and go into an IRA or other retirement account of your choice.

Just remember to track how much you are allowed to contribute each year. There's a penalty for over-contributing. The contribution limits depend on which type of account you have and are adjusted annually. When you reach age 50, you can start adding a catch-up contribution.

Next, take advantage of free advice. There is a wealth of valuable information online about how much to save, how to diversify your portfolio, how to maximize your employer's 401(k) match, how to avoid excessive fees and commissions when you invest, and much more.

Choose Appropriate Investments

Because your retirement could be years—even decades—in the future, you need to put money into investments that will generate interest, pay dividends, and grow in value so they can be sold later for a profit. You have to be able to beat inflation, or at least keep up with it, and inflation is not going to stop when you retire.

If you aren't already familiar with the basics of investing, take some time to learn them. Stocks are relatively risky but historically can generate high returns. Mutual funds have many advantages and should probably be the centerpiece of most retirement portfolios. You can buy mutual funds that invest in stocks, bonds, a combination of the two, or many other types of assets.

“Having an appropriate asset allocation that is represented by a broad base of index mutual funds can help reduce the emotions associated with the more frequent rise and declines of individual stock prices,” says Kevin Michels, CFP®, a financial planner with Medicus Wealth Planning in Draper, Utah. Index funds also have the advantage of relatively low fees and costs—another important thing to keep an eye on as you invest.

It's crucial to control investment expenses in retirement as high fees can erode returns.

While buy and hold is a time-honored investing strategy, you will also want to review your asset allocation over time. Investments that are appropriate for a 24-year-old may not be for a 64- or 74-year-old.

“When you get older, it is much more important that you find safe investments,” says Kirk Chisholm, wealth manager at Innovative Advisory Group in Lexington, Mass. “When you are close to retirement, you cannot afford to lose a large percentage of your savings. You can lower your risk by finding bonds with a short maturity date, CDs, fixed annuities (not equity-indexed or variable), safe dividend stocks, physical real estate, or other assets that you would consider yourself an expert in.”

What to Do as Retirement Draws Closer

Before you retire, try to make a reasonable estimate of how much money you and your family will need to live comfortably during retirement. Then add up all your likely income sources and compare the two. If your income won't be adequate to cover your expenses, you'll need to make some adjustments.

“Most important,” says Cullen Breen, president of Dutch Asset Corporation, in Albany, N.Y., “is the Golden Rule: Keep your expenses as low as possible. This cannot be overstated and is the single most important thing that you can control.”

You will probably have multiple sources of retirement income, starting with Social Security. You can get an estimate of your future Social Security benefits at the website If you have earned at least 40 credits (roughly ten years of work), you can obtain a personalized estimate using the SSA's Retirement Estimator. Or, you can simply plug your current income and planned retirement date into the Social Security Quick Calculator for a ballpark figure.

If you're married, bear in mind that even if your spouse isn't eligible for Social Security based on their own work record, they may be entitled to spousal benefits based on yours. You may also be able to increase your Social Security income substantially by taking benefits later, rather than when you're first eligible.

Your other sources of retirement income might include one or more defined-contribution plans, such as a 401(k) or 403(b), a traditional defined-benefit pension, and any IRAs you've established over the years.

Outside of retirement accounts, you will probably have other assets, such as individual stocks and bonds, mutual funds, exchange-traded funds (ETFs), annuities, and CDs.

When the time comes (or earlier, if at all possible), you will also want to read up on withdrawal strategies that can help you maximize your retirement income, minimize your tax bill, and—especially important—not deplete your savings prematurely.