For some of us, retirement may seem a long way off. But consider this: the steps you take now will have an enormous influence on the quality of your life 10, 20, 30 or 40 years from now. Whatever your age, the time to start planning your retirement is now. All it takes is five simple steps.

STEP1: Establish clear, simple, and memorable goals.
Ask yourself, “When do I want to retire?” and “How much money will I need to retire?” Check out our Visual Retirement Planner in our related tools to help you answer these questions.

STEP 2: Put yourself on track to meet your goals.
When you retire, you’ll want to have enough money to enjoy your free time and maintain your current lifestyle. The sooner you start putting money away, the more time it has to grow. Start a monthly transfer from your checking account to your investment account.

STEP 3: Make regular contributions to your company retirement plan.
If your employer offers a 401(k) or 403(b) plan, participate to the maximum. Your contributions are made with tax-deferred dollars so they may reduce your taxable salary, and both contributions and earnings can grow tax-deferred until they’re withdrawn. If your employer matches your contribution, you’re throwing away free money if you don’t participate.

STEP 4: Contribute regularly to an IRA.
If you’re not covered by a company retirement plan, make regular contributions to an IRA. Regardless of the type of IRA you qualify for – Traditional or Roth – your savings will grow tax-deferred. And even if you’re contributing to a plan at work, consider putting some additional money in an IRA. To get on the fast track to retirement, go to our products and services page to view Wells Fargo retirement accounts and the type of IRA that best suits your situation.

STEP 5: Review your goals and track your progress annually.
Read your retirement plan statements and continue to monitor your spending. Are you on target? Remember, you’re involved in a marathon, not a sprint: day-to-day fluctuations in the stock market will have little bearing on your long-term goals.

A rule of thumb
By the time you’re ready to retire, you probably won’t have the same expenses you do now. Some costs will decrease while others will increase. Many financial planning experts estimate that you may need as much as 60% to 80% of your current annual after-tax income to live on through your retirement to maintain your current lifestyle. Think about how you can trim expenses now in order to save more for the future. The sooner you start, the less painful it will be.

Tiffany Bass Bukow is the CEO & Founder of the #1 Personal Finance Website for Women and Families – www.msmoney.com. My life mission is to help people and the world thrive through creating companies that provide money, career and life skills education.

By Kara Stefan

Most of the time, the greater the risk you assume with your investments, the greater your reward. But sometimes excess risk can lead to nothing more than just that–excess risk.

That’s why it pays to keep track of your portfolio and find out exactly which securities deliver good returns, and which are a drain on your portfolio.

By the same token, it’s often hard to compare apples to oranges. For example, whose 401(k) plan performs best, yours or your spouse’s? With various percentage holdings in different stock and fund offerings, you can never really be sure.

You could compare your rate of return; but then again there’s what’s called your risk-adjusted return. It’s equally important to know if the amount of risk your portfolio assumes yields proportionately higher returns.

Tracking on the Web
Morningstar.com offers two tools to its members who register as members for free on its Web site:

• Portfolio Manager allows investors to track, analyze, and continuously update the progress of multiple portfolios. You may use it to follow your 401(k), any investment account, or as a watchlist for investments you are considering.
• X-Ray Overview allows investors to analyze investments across 8 different screens, including Asset Allocation, Style Box Diversification, Stock Sector, Stock Type, Stock Statistics, Fees & Expenses, World Region, and Top 10 Holdings.
• Premium Service enhances the Morningstar service (for a $9.95 monthly fee) with the ability to search Morningstar’s database of 15,000 stocks and funds, and access their ‘Quicktake Reports.’

The Morningstar system helps investors stay on top of how current market conditions affect their portfolios. You can monitor changes in the value of your stocks and funds since your purchase date and study year-to-date returns at both the portfolio and individual stock level.

RiskGrades offers another tool on the Internet for portfolio tracking. It can also be found at other financial Web sites that license the technology, such as Reuters, Sharepeople, and Worth. The RiskGrades tool is free to online users, and its service helps investors put risk into perspective when evaluating their portfolios.

“In general, we’ve found that people are under invested–in other words, they don’t invest aggressively enough,” says Ethan Berman, CEO of RiskMetrics, the spin-off company from J.P. Morgan that developed the RiskGrades system.

Once you register at the RiskGrades site, you can input the market symbols and number of shares you own for each holding or mutual fund in your portfolio, and the tool does the rest. It will give each security and your portfolio a numerical risk grade between zero and 1,000–with zero indicating a no-risk portfolio.

In addition, RiskGrades now offers a measure of risk-adjusted returns for assets within a portfolio. This allows you to evaluate returns in relation to the degree of risk being taken.

“Many investors fail to understand that return is only half the equation,” Berman explains. “It’s not until return is weighed against risk that you achieve an accurate and true assessment of how your investments are performing.”

The Software Solution
If you’d prefer more in-depth portfolio tracking that can be combined with your tax and/or accounting functions, try one of the many off-the-shelf portfolio tracking software packages. Some of the most popular offerings include:

• Easy ROR (Rate of Return)-(Hamilton Software, $149): This package provides exact calculations of internal and time-weighted returns on your investment. It requires only minimal data input, including deposit, withdrawal, and optional tax or fee information.
• Investor’s Accountant-(Hamilton Software, $395): This tool tracks an unlimited number of portfolios through the one-time entry of data for prices and dividends. The software measures portfolio performance, evaluates securities and market trends, can aid you in year-round tax planning, and produces detailed accounting records and financial reports.
• Reeally!-(Mantic Software Corp., $495): At the top of the line is Reeally!, a performance measurement software that tracks all of your investments and trading activities, measures your true portfolio performance (including long and short positions and margin reserves), compares the performance of filtered slices of your portfolio over time, and handles multiple currencies for international investors.

Coming off a long bull run in the market, investors are now witnessing more market volatility than ever. That’s why it’s so important to carefully assess what you currently own in order to make informed investment decisions for the future.

Today’s technology offers many options for evaluating not only what you own today, but projecting how your portfolio will react in various market scenarios in the future. They say you can’t predict what the market is going to do, but you can prepare yourself by imagining what could happen. Accurate and proficient portfolio tracking tools allow you to do just that.

Tiffany Bass Bukow is the CEO & Founder of the #1 Personal Finance Website for Women and Families – www.msmoney.com. My life mission is to help people and the world thrive through creating companies that provide money, career and life skills education.