Retirement strategies vary according to stage of life

Paula Dougherty, ChFC, CLU, MBA, is a financial planner with American Express Financial Advisors Inc.

The actions people can take to rebuild their portfolios in a down market depend largely on how close they are to retiring.

While young investors have more time, those closer to and in retirement need a more immediate plan to regain their savings.

Here are some retirement planning strategies for every stage of life:

Young investors

Develop a long-term financial plan. To best take advantage of the early years, meet with a financial advisor soon to develop a long-term financial plan.

Take advantage of savings vehicles. Begin contributing to a 401(k) or Individual Retirement Account.

Reassess needs. Make adjustments to counteract recent market losses.

Pre-retired investors

Don't ignore inflation. To outpace inflation, be sure the portfolio contains high-yielding investments such as stocks.

If accounts are down, catch up. The "catch-up" provisions in the 2001 tax law can help pre-retirees save more money.

Hold assets in many segments of the market. Have an investment mix that will keep the purchasing power of assets ahead of inflation and provide protection from future market setbacks.

Retired investors

Consider tax implications of withdrawals. Take most of the money from tax-free sources such as Roth IRAs, U.S. treasuries and life insurance.

Invest for income vs. appreciation. Invest in something stable that will produce a steady income stream such as a corporate mutual fund.

No matter what stage of life an investor is in, a qualified financial adviser can offer advice on strategies and help chart the path to retirement.