Planning for retirement is crucial to the security of your future. Savings and investment strategies can make a big difference in how easy it is to maintain a comfortable lifestyle during this phase of your life. While there are many available options, each with its own advantages and disadvantages, this article will take an objective look at seven common methods used by savvy planners like Robert Nico Martinelli.

1) Maximizing contributions to your IRA

Contributing the maximum amount to your individual IRA every year is an excellent way to accumulate funds for retirement. The maximum contribution may not seem like much in today’s dollars, but it can make a real difference over time.

2) Contributing to your 401(k)

Contributing to your 401(k) plan at work is another great way to accumulate funds for retirement. Most employers will match some of the money you contribute, essentially providing free money toward your future. But there are drawbacks to consider before contributing too much. For one thing, any funds invested in a 401(k) will be pre-tax, which means they are not available for other purposes during the year. Also, if you can’t make it through your working years without tapping these funds early, penalties may apply when you try to access them later on. Contributing too much here could also hinder your ability to rebuild after taking a job that pays less or requires fewer hours.

3) Participating in a 403(b)

If you work for a non-profit organization, a 403(b) might be available as an investment vehicle. The tax benefits are much the same as those for a 401(k). But here again, unless your employer provides matching funds, there is no free money involved. So if you contribute too much to this account, or if you fail to make it through your working years without drawing down these funds, penalties may apply.

4) Investing in real estate

Buying income property can be profitable and provide a place to live simultaneously. Using borrowed funds from a bank is usually necessary to make such deals happen. Leverage can magnify profits but also increases risk. And remember that even though you may own several rental properties, it’s important not to invest more than you can safely afford to lose.

5) Investing in stocks and bonds

Investing in publicly traded securities is another popular option for people saving money for retirement. While investments like this offer the potential for great returns, they also carry a significant risk of loss. Unless you have a high tolerance for risk or are comfortable employing strategies that limit your downside exposure, investing too much here could be dangerous to your long-term plans of retiring comfortably.

6) Saving toward a down payment on a home

Purchasing a home usually means taking out a mortgage loan from a bank or other lending institution. In addition to paying an ongoing monthly expense, homeowners generally must pay interest only on the amount borrowed to purchase their home. As a result, you can expect your total monthly expenditures to increase when you own rather than rent your home.

7) Using an annuity

An annuity is an arrangement where a company pays you a guaranteed income for life in exchange for a lump-sum payment upfront. Annuities have been criticized by many financial experts, including Robert Nico Martinelli, for carrying high fees and potentially exposing consumers to market volatility after surrender charges no longer apply or if long term care becomes necessary. Yet there are circumstances where using an annuity may be appropriate for retirement planning purposes. If you need to create an income stream from your savings but don’t want to take the risk of losing your income, an annuity may be worth considering.