If you are like most people, you probably think retirement planning is only important when you are about to retire. However, proper planning requires a much longer period of time, preferably from the day you start working until well beyond your actual retirement date. In fact, it's never too early to start planning for your retirement.

The world today is vastly different to the one in which you began your working life. Back then, it was normal to believe that if you worked and paid your taxes, you would be entitled to a pension when you retired. Now the expectation is that, as far as possible, you will have to fund your retirement yourself.

A solid retirement plan will mean the difference between retiring blissfully or having to make do with a less-than-preferred lifestyle. Life expectancies have improved. This has given rise to a real concern that the CPF nest-egg alone will not be sufficient for many in their old age to maintain the lifestyle that they are accustomed to.

Proper asset allocation is the most important factor for any successful investment strategy. And this couldn't be truer than when you are approaching or have reached retirement age. Hence, top of your "to do" list is to make sure that you adjust your "risk profile" as you enter the retirement phase of your life. What this means is that in previous stages of your life, you probably made investment decisions that aimed at getting the most growth out of your capital. There is a chance that the risk in these investments is slightly higher than you can now afford or feel comfortable with.

Generally, an investor in his 50s or 60s should move towards a more conservative investment programme but contine to focus on capital growth and hedge against inflation. You should build an investment programme that balances your portfolio, and that avoids excessive concentration in just one investment or type of investment. A professional adviser will be able to help you get the right balance between income and growth. You will still need some growth assets to make sure your capital doesn't run out too early.

If your budgeting has been done properly, you should be able to save at least 10-15% of your gross annual income, outside of CPF contributions. Additionally, you should factor projected future inflation into your savings requirements. For example, if you can stash away, say $10,000 a year in savings and inflation is around 2% per annum, you should strive to save roughly $10,200 in the next year, $10,400 in the year following that and so on. This way, you could negate inflationary pressures on your savings.

You should strive to become an informed investor with a balanced approach to investing that will help you build wealth, whatever the size of your investible savings. You should also probably strive to set aside a higher amount in the reserve (emergency) fund. This reserve money should be put in both highly liquid - easy to turn into cash - and low-risk investment vehicles such as fixed deposit accounts. If you have disability insurance, this reserve fund should cover the waiting period for the disability payout.

This brings us to the issue of health - your health. You need good health to have a good retirement, so now is a good time to develop a personal health care programme. It may also be time to re-examine your life insurance situation. Life insurance becomes increasingly expensive by this age. You need to work out whether your current savings will provide enough income and if your health isn't in the best state, whether long-term care insurance is viable.

Ultimately, in evaluating your portfolio goals, you should consider such items as long-term needs, capital preservation, current income requirements, liquidity needs, tax-related issues and long-term appreciation.