After years of systematically saving for what once looked like a faraway retirement, you�re beginning to look ahead. You�re reviewing your 401(k) and other retirement accounts, and you�re getting ready to live the dream. Congratulations! Many Americans don�t have...

After years of systematically saving for what once looked like a faraway retirement, you�re beginning to look ahead. You�re reviewing your 401(k) and other retirement accounts, and you�re getting ready to live the dream.

Congratulations! Many Americans don�t have nearly enough retirement money set aside. You should appreciate your success.

But don�t start kicking back just yet. As much as you�ve planned and worked to get to this point, there�s still much to do. After all, you will now have fewer years to fully recover from any missteps with investment choices or fluctuations in the stock market. So your decisions matter even more at this stage.

To make the most of your retirement money once retirement is within reach, here are six steps to take.

1. Understand Your Retirement Money and Financial Life Stage

A financial advisor will frequently divide clients� financial lives into five stages. The names may vary, but here�s the gist:

Early career Family/growing career Prime earning years Pre-retirement Retirement

Each period has different concerns. The first three focus on accumulating wealth. The next two stages focus on harvesting what you�ve managed to accumulate.

If retirement is changing from a distant goal to something more definite for you, welcome to stage 4: pre-retirement.

The timing for pre-retirement will be different for everyone depending on your investments, not to mention market volatility and other factors. But a good rule of thumb is five years in advance of your actual retirement.

At this phase, you�ll want to start thinking differently about your investment choices. Just like a sports team that�s way ahead at the end of the game, this phase focuses on avoiding mistakes instead of trying to run the score up.

For instance, chances are you will want your portfolio to be less volatile. That will help ensure a predictable, comfortable fifth stage, which is, of course, retirement.

2. Update Your List of Financial �What Ifs?�

Planning is a continual exercise of asking �what if?� until you�ve found the right balance between achieving your most treasured goals and the risk of running out of money too early. But if you�re like most investors, you either haven�t written up a formal financial plan or, if you have, you haven�t updated it for quite a while. That time has come.

Your up-to-date plan will help you understand your next steps. For instance, you will need to:

Estimate the amount of income you can safely draw from your portfolio during retirement. Calculate any effects of large purchases or sales you want to make when you retire. Consider your new tax bracket once you are no longer working. Plan how your estate should be transferred.

Once you have this information, you can reassess your financial goals to make sure that, first, they are still meaningful and, second, you can afford them.

3. Consider Hiring a Professional to Look After Your Retirement Accounts

Unfortunately, employers aren�t able to give specific advice about how to invest your 401(k) investments for pre-retirement. Since all these topics can be complex � and costly to get wrong � now is the time to get advice from a pro or schedule an appointment with your advisor if you haven�t had one in a while.

If you need to find a financial advisor for advice about your retirement funds, it�s a good idea to find someone holding the Certified Financial Planner� designation, which means they have established experience in planning, completed a rigorous course of study and are required to follow a code of ethics.

Good financial advisors tend to be expensive, but the wrong advice is even more costly. For example: withdrawing money from your retirement account too early can lead to costly penalties.

You can save money by only hiring an advisor when you need one. Try to find a planner who works on an hourly basis or, if you have a large account balance, charges a fixed fee.

4. Get Your 401(k) Ready for Retirement

The term you�ll hear is �preserving 401(k) for retirement,� which essentially means making sure you optimize the return on your 401(k) investments in this stage of your financial life. You�ll want to ratchet back risk so a few bear markets over the years won�t decimate your savings.

Here are some basics to consider when preserving 401(k) for retirement:

You can reduce risk by diversifying more and shifting part of your portfolio to more predictable assets such as high-quality fixed income, dividend-paying stocks, preferred stock and cash or money market funds. Unless you go entirely cash � that�s usually a bad idea � your portfolio�s value will still fluctuate after you�re retired. Bond and high-dividend-paying stock prices tend to move in the opposite direction as interest rates. One way to insulate against that is to have some money coming due every year so it can be invested at the current interest rate. That�s called �laddering� your bond portfolio. Since stocks have historically grown faster than inflation, you should plan on holding at least some stocks. Low-cost mutual funds can help you stay diversified when you have fewer dollars to put in the stock market.

Remember, even in retirement you still won�t be done trying to grow at least some of your money. You�re going to be retired for a long time! Inflation will nibble away at your purchasing power, so preserving 401(k) for retirement is an important step.

5. Don�t Rush to Roll Over Your 401(k) Account

If your 401(k) has enough low-cost investment choices and you don�t have a complicated estate to leave behind, you may not automatically need to roll over the funds into an individual retirement account when you retire.

Why a 401(k) Rollover Might Be a Bad Idea

If a financial advisor recommends you roll your 401(k) account into an individual retirement account (IRA), first estimate the cost of investing into a whole new portfolio and then get a second opinion.

There can be a lot of paperwork and expense involved in a rollover in exchange for very little value. And if it�s done wrong, you could trigger costly tax consequences.

Why a 401(k) Rollover Might Be a Good Idea

There are times when rolling over your retirement money to an IRA makes sense.

Even the most wonderful employers can have outdated retirement plans. Retirement-plan laws and investment products have evolved over the years. If your plan provider hasn�t updated its investment options in years, you might be better off having more control and options in an IRA.

6. Be Ready to Adjust Your Plans

If you�ve walked through these steps and you don�t like what the numbers are telling you, don�t panic. It�s better to know now than be caught short when you need your investments the most. There�s no better time to adjust your retirement plans and perhaps work with a financial advisor on new retirement investment goals.

Contributor Sam Levine holds Chartered Financial Analyst� and Chartered Market Technician� designations and has written on finance topics since 2003. He is an adjunct professor of finance at Wayne State University in Michigan.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

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