ONE OF THE MOST important investment decisions you will ever make is not whether to retire but when you chose to do it. Every American looks forward to the day when they can trade the 9-to-5 grind for a little bit of well-deserved rest and relaxation. But the easiest way to erase decades of smart saving - picking the right funds, contributing the right amounts - is to start taking big withdrawals at the wrong time, especially if the stock market is in the midst of a prolonged slump.

By tapping an account during a down period, investors run the risk of eating into years of valuable retirement income that they may never be able to regain. They may have the money today but as the typical American starts to live well into their 80s they may not have that money down the road. This is particularly important now, as many market experts think that despite record highs in the stock market we will soon see a correction. Luckily, there are some easy steps you can take, like getting a handle on what financial pros call your investment horizon, to help you insulate yourself from this problem well in advance of it happening.

And what a problem it is. Moshe Milevsky, an associate professor of finance at York University, recently presented a retirement conference audience with two identical $100,000 portfolios whose owners, he said, would remove $9,000 from their balances every year. Despite having similar average annual returns and standard deviations over the long haul, one portfolio started with a three-year average return of -5.6% while the other enjoyed a 22.1% average annual return during the same time period. After the first three years the portfolios ran through similar market swings.

Milevsky found the first portfolio, the one experiencing negative returns right out of the gate, lasted just 15 years into retirement while the second portfolio still had

Question: I'm 28 years old and looking to invest some extra money that's come my way recently, $10,000 to be exact. Any suggestions? - Brandon, Charlotte, NC

Answer: It's always a challenge trying to figure out the best way to invest a windfall. But the task is even more daunting when you're dealing with a rollercoaster market like the one we've had in recent weeks, where big sell-offs are followed by hopeful rebounds that give way to more unsettling downdrafts, creating a climate of fear and uncertainty all around.

So I'm happy to weigh in on this issue. I'll try to answer in a way that can also give guidance to others out there who are unsure how to navigate a market like this, whether they're investing new money like you or considering what to do with the money they've already invested.

The first thing I think you need to do is be wary of some of the advice that's already floating around out there. I don't want to say much of it is flat-out bad. But I

Big stock-market drops can be a boon for the young since they get to buy low and then let their investments grow for decades.

But when you're about to retire, steep drops like the kind we've seen in the wake of the subprime debacle seem less like buying opportunities than harbingers of under-funded days in your near future. After all, you're probably thinking about selling stocks, not buying more.

Certified financial planner Steven Kaye doesn't get rattled for his soon-to-retire clients when the Dow takes a dive. "To us, it's completely irrelevant," Kaye said.

That's because Kaye, who is president of the American Economic Planning Group, divides their portfolios into two components: short-term and long-term. The long-term is the part you leave in stocks and other higher risk investments. It's the short-term portion that will be your "safe money" -- the money that gives you peace of mind whenever stocks go awry.

For his clients with an aggressive risk tolerance, he makes sure they have five years' worth of cash flow in fixed income. For clients with a moderate risk tolerance,

Procrastination is the greatest obstacle to most people accumulating a healthy, well-funded retirement account.
There are hundreds of excuses you can use to explain why you aren't saving for retirement, but none of them are going to help when you turn 65. The truth is, most people can save for retirement with just a little bit of organization and self-discipline.

Here are the basic steps that you need to take today to ensure you have enough retirement savings:

1. Begin today: No matter what your age, the time to start saving for retirement is now. Decide today and commit to it. The longer you postpone saving for retirement, the more difficult it will in your later years. Time and compound interest are your friend, which means the sooner you begin, the less painful it will be.

2. Start saving any amount: The amount you start with really doesn't matter. It's the process of placing money

Most Americans haven't felt the recent decline in the dollar because the rest of the world, especially Asia, has either cut prices or tied their currency to the value of the dollar. That means the stuff we import from them hasn't risen in price. But if you travel to Europe, you'll get a real shock at how little the dollar buys these days.

What about in the future? We worry about having enough dollars to retire, but what will those hard-earned dollars be worth in the years ahead? It's enough of a concern that you might want to take a small portion of your funds and hedge your bets, even though the Fed says it has inflation under control.

Even at a 3% annual inflation rate, the spending power of your money will be cut in half in just 24 years! Which means that you'll need twice as much money in your last year of retirement as in your first in order to maintain your lifestyle! Now that's a daunting thought.

It's enough to make you consider at least some form of hedge against the possibility that the dollar will be devalued by

If you'd rather spend more time at the beach or on the links and less time fretting over your investments, relax. Retirees have plenty of one-stop fund options to choose from. Target-date retirement funds, which allow you to pick the fund whose asset allocation is geared to your expected retirement date, typically include a choice for investors who have already reached their target dates. In choosing the right retirement-income fund, avoid those that heap an additional layer of fees on top of the expenses of the underlying funds. Total annual expenses for one-stop life-cycle funds should be less than 1%.

After fees, asset mix is the most important factor in determining which retirement-income fund is best for you. Funds from Fidelity, T. Rowe Price and Vanguard all have low fees, but each has a slightly different investing strategy.

Vanguard Target Retirement Income (symbol VTINX) has just 30% of its

A comprehensive review of your retirement plan every few years is almost as important as having a retirement plan. What you save for retirement is one of the most important financial challenges you might face in your lifetime so make sure you review and monitor it often.

Retirement Goals
Do the goals you originally set still apply? Do you still plan to retire at the age you first decided upon? Has an illness or other life event changed your retirement goals? Are your investments growing in a manner to finance your retirement goals? You might need to reevaluate your goals or set some now ones periodically because changes are constantly being made in our lives.

Personal Finances
Is your income more or less than when you originally set up your retirement plan? Do you have additional income to invest from a second job or your spouse's job? Have you had a bankruptcy or had to make major purchases in the past few years that might affect your retirement plan? Do you have children in college that might dip into your retirement funds? Have you had to withdraw some of your retirement investments for personal use? Your circumstances at any given time will dictate what you can put back for your retirement.

Everybody must retire sooner or later so if you haven't thought about it yet it's better later than never. Think about all the things you can do when you retired and have plenty of time.. Will you travel or start collecting coins? Will you have enough funds to accomplish all that? Where will you live? Who will take care of you?

Do you have your retirement picture right now?

Let's move on and start making RETIREMENT PLANNING! Don't forget that you can discuss your plan with us and other community members in our Retirement Planning forum board.