Don't think too short term
This is good advice regardless of where you are in the retirement planning process. Too many people get caught up in the day-to-day gyrations of the market.
For individuals in their 20s, 30s, and even 40s and 50s, it's paramount to save as much as possible. "Especially at younger ages, your savings patterns are going to have a much larger effect on your retirement than will the returns you earn in the market," says Jeffrey Brown, professor of finance at the University of Illinois.
Even at older ages, thinking long term is important. Recent longevity studies have shown one person in a couple could very well live to 90-something.
And when considering a potential legacy for heirs, you have to think even longer term. Over a 30-year period, inflation at 3 percent would erode the value of a dollar to about 41 cents.
Given that, it's important to preserve your purchasing power with such investments as stocks and real estate that have shown a good chance of keeping up with inflation over the long term.
If you believe a well-diversified portfolio makes sense at 30 or 40, then you ought to still believe in diversification at 60 or 70 as well. "Although you probably want a less risky portfolio at older ages," says Brown, "this does not necessary mean zero risk. Diversification still matters."