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You've heard it before: The most important thing is to invest in a 401(k) or other retirement account, and if you can't afford to contribute $18,000 to your 401(k) (the 2016 limit), at least set aside enough to maximize the amount your company will match. The challenge is to pick the right funds. "Choose your employer's most aggressive 401(k) fund," says John Claghorn, at RBC Dain Rauscher. "The biggest mistake people make is being too cautious, especially when they're young."

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Now's the time to max out your contributions to your retirement accounts (if you haven't already). The easiest way to choose an appropriately aggressive retirement plan is to invest in a "life cycle" or "lifestyle" fund—one that automatically adjusts your holdings to less risky investments based on the number of years until you retire, says Suze Orman. For a rough idea of how much you'll need for retirement, personal finance expert Eric Tyson offers three scenarios:

  1. You'll need 65 percent of your projected preretirement income if you save 15 percent of your annual income, are a high-income earner (generally more than $100,000), will own your home debt-free when you retire, and plan to live modestly in retirement.

  2. You'll need 75 percent if you save 5 to 14 percent of your annual income and want to maintain your preretirement lifestyle.

  3. You'll need 85 percent if you save less than 5 percent of your annual income, have to pay a mortgage or rent in retirement, and want to maintain your current lifestyle.

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If at age 26 you invest $20,000 and it earns 4 percent a year, it will grow to $95,000 by the time you reach age 65. If you wait until you're 46 to invest the same amount, it will grow to just $43,000. You've undoubtedly come across examples like this before to prove just how much more a person has to put away to catch up. The obvious advice from our panel to anyone who is behind in her savings is to spend less and save more, but John Claghorn has a further suggestion: "If you are going to be working for another two decades, and you are not going to be withdrawing money from your 401(k) or IRAs to buy a home or pay college tuition, invest as aggressively as you can tolerate."

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"A good investment rule of thumb is: 110 – your age = percentage of plan you should have in stocks," says Eric Tyson. "The rest should be in a bond index fund." After age 50, you can take advantage of the 401(k) catch-up provision and add an additional $6,000 to the $18,000 contribution limit. Another way to beef up retirement savings at this point is to consider downsizing your home. "The IRS lets you profit $250,000 ($500,000 if you're married) tax-free from the sale of your house," says Tyson, who suggests putting much of what's left after the purchase of your new home into retirement accounts.

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Now is when your attention should begin to include the smartest way to access your savings. At age 59 1/2, you may begin to withdraw money from your retirement accounts penalty-free. (The IRS requires you to take a minimum annual amount out of your tax-deferred accounts once you reach age 70 1/2.) Our panel says that one of the big mistakes they see clients make is taking out more money than they'll use in a given year (which means they end up paying income tax on an amount they could have left in a tax-sheltered investment).

You can begin receiving Social Security as early as age 62; the longer you wait (up to age 70), the larger your payment—but there may be advantages to receiving income earlier. Use one of the benefit calculators at to help determine which option is best for you. And as Eric Tyson pointed out, you can always continue to work. "Especially if you enjoy your job, consider retiring at a later age," he says. "You'll get a double benefit: earning and saving for money for more years."