A Wellness Check for Your Retirement Plan

As part of Morningstar's Guide to Saving for Retirement, our director of personal finance, Christine Benz, is walking through the key decision points to ensure your portfolio is poised to help you amass the wealth you will need for retirement. Check back all week for fresh content.

Christine Benz: Hi, I'm Christine Benz for Morningstar.com.

Before you get too far into the weeds with your retirement plan, take a step back and consider the main levers you have as an investor. Which factors have the biggest impact on your plan, and which will tend to be less significant drivers of its success or failure?

Investment selection can be important--picking a really great stock or mutual fund can boost your plan, and a really terrible one can blow a hole in it. But your investment picks will tend to be less important than a couple of other factors. First, how you split your assets across stocks, bonds, and cash; and second, how much you save and invest in the first place. It may seem obvious, but your savings rate--and how long you save--are by far the most biggest determinants of your plan's success.

But how much should you save? Investors may have heard old rules of thumb, like you should plan to save 10% of your salary. But high-income investors should definitely target a higher number--15% or even 20% or more.

On an ongoing basis, it's also worth checking up on how you're doing on your retirement plan. There are a lot of retirement calculators on the web that you can use; my advice is to sample more than one.

Fidelity Investments has also published some benchmarks for retirement-savers. The firm's research suggests that 35-year-olds should aim to have at least twice their salaries saved for retirement; 50-year-olds should target 6 times their salaries, and 67-year-olds should target 10 times their salaries. It's safer to let your contributions do the heavy lifting on your retirement plan; that way you'll have to rely less on the market's cooperation.

Thanks for watching. I'm Christine Benz for Morningstar.com