Winter is just around the corner, and our summer vacations are now memories. Most people spend more time planning their vacations than planning for retirement. (I bet you are already planning your next vacation!) But if you think about it, planning for both of these events is similar.

When planning a vacation, you normally start with an ideal experience or destination in mind, then you budget accordingly. When planning for retirement, start by envisioning what you want your ideal future to look like. Do you want to retire early? Would you like to travel the world? Do you hope to start a second career or work part-time? Whether you’re planning for a vacation or retirement, the same advice applies: Know where you want to go and plan how to get there. Once you’ve got a goal in mind, the following steps can help you create a retirement roadmap:

1. Build a timeframe. When do you start? Whether you’re planning a trip for next summer or for retirement in 10 years, the timeframe will affect how you save for your goal. A general rule: the longer your time horizon until retirement, the more risk you may be able to take with your investments. If the horizon is very short, you would be wise to focus on less risky investments because you may not have time to recoup any losses.

2. Diversify your portfolio. On vacation, you’d probably never dream of keeping all your cash in one pocket; you wouldn’t feel safe. The same is true of investing. It’s not safe to invest in just one asset. This strategy is called the principle of diversification, or as your mother told you: Don’t put all your eggs in one basket. It does not guarantee a profit or insure against loss, but it does help you manage the risks you will face.

3. Choose an asset allocation. A mix of various asset classes, such as stocks, bonds and alternatives, accounts for most of the ups and downs of a portfolio’s performance. It’s important to monitor and maintain your allocation according to your risk tolerance. Keep in mind that your circumstances may change over time, and even if you’re happy with the allocation you have today, your goals may need to be adjusted in the future.

That brings me to an important final point: Don’t assume your plans are etched in stone! Have you ever embarked on a road trip to find the highway is backed up for miles when you come up over the crest of a hill? Or have you ever missed a connecting flight because your plane was delayed? Similar challenges may occur as you’re saving for retirement. And just like you would on vacation, you may need to reset your expectations or make some adjustments. Be prepared for these detours, and your retirement roadmap will still be useful. PM

Daryl Dagit is the manager and financial advisor in the Peoria office of Savant Capital Management. He can be reached at (309) 693-0300.

This is intended for informational purposes only and should not be construed as personalized tax or investment advice. Please consult your tax and investment professional(s) regarding your specific circumstances.