Don’t Wait To Start Saving Too many people wait to start saving for retirement until after they buy a house or pay for their children’s college education. While this method mayseem logical, it typically doesn’t work. Time is critical to the growth ofyour retirement account. If you put other goals first and wait to startsaving for retirement, you will miss out on the benefits of compounding for all those years you weren’t saving. It can be very difficult to make upthe difference once you get a late start.

The ideal time to start saving for retirement is as soon as you possibly can. It may be hard to save for something so far off when you have so manycurrent demands on your paycheck. Start with a small amount every paydayand increase it as your earnings increase. With a good budget and a littlediscipline, you may be able to save enough to buy a house, send the kids to college, and have enough for a comfortable retirement.

Don’t Avoid the Stock Market Occasional declines frighten some investors away from the stock market.

Instead, they invest exclusively in more conservative investments because of their lower risk. What many investors don’t realize is that conservativeinvestments also carry risk — the risk that they won’t stay ahead of inflation. With essentially little gains from investment growth, progressis generally limited.

If you have a significant number of years before you will be ready to retire, then your investments have time to recover from any declines in the stock market. Choose a mix of investments, including stocks, that willgive your retirement savings the chance to grow over time.

Don’t Follow the Crowd Everywhere you look there are financial experts giving advice on how and where to invest your money. It’s easy to become confused and misled. Inmost cases, by the time a hot investment tip hits the airwaves, it’s too late to benefit from it. When you are saving for retirement, you are a long-term investor. Avoid the fads and short-term trends and stick to yourlong-term investment plan.

Don’t Forget To Review Your Plan Once they have implemented their retirement investment strategy and it’s working for them, many investors forget to review their plan periodically.

If your personal or financial situation changes significantly, it may affect your retirement investment strategy. So, once your strategy is in place,don’t forget to review it occasionally to make sure it still suits your needs.

Make sure you review your strategy again after a death, divorce, or a change in employment in your family. Also, as retirement draws closer,you may want to shift some assets from more volatile investments to more conservative investments.

Your retirement years should be a time in your life when you can relax, travel, and spend time with loved ones. Don’t make investment mistakesnow that could cost you your future financial security.

(Alan S. Moore is financial advisor of Legg Mason Wood Walker, Inc., adiversified securities brokerage and financial services firm that is a member of the New York Stock Exchange, Inc. and SIPC.)

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