Diversify your investments
Diversification, or dividing your money among different types of investments, should be a key part of your retirement savings strategy. By "spreading your risk" across a range of asset classes (stocks, bonds, cash, etc.) and subclasses (anything from large-company U.S. stocks to Eastern European government bonds), you insulate your portfolio against severe loss if one investment suddenly loses value.
Mutual funds and exchange-traded funds (ETFs) offer a degree of diversification—each holds dozens, even hundreds or thousands, of investments at once. In particular, low-cost "index" funds, which aim to match the performance of broad sections of the market, can help you save money while mitigating some risk.
Take your time
In general, the longer your "time horizon" (how many years until you'll need your money), the more risk you can afford to take to seek greater long-term rewards. Because you'll have more time to recover from losses, that means focusing on equities (stock investments), which have outperformed other types of investments over long periods—but with serious road bumps along the way. Later on, you'll want to shift toward fixed income (bond) investments, which have provided more stability (with smaller long-term returns).
Consider a target-date fund
If you don't want to figure out exactly where to invest and when to make changes, a target-date fund can do the work for you. These "funds of funds" invest in a range of stock and bond funds, and their holdings gradually shift from more aggressive (stocks) to more conservative (bonds) over time. So, you can simply choose a fund whose target date is closest to the year you plan to retire.
Mid-career: Stay on track
Once you're well into your career, your earning power and, hopefully, retirement savings have gained momentum. Maybe you've gotten that big promotion. Maybe you've changed careers or started a business. Maybe you've paid off college loans and freed up extra cash.
Because your financial situation is likely more secure, it's important to take a closer look at your strategy.