As many baby boomers approach retirement age, the $64,000 question is how much money they will need to retire and how they can optimize their nest eggs, through the use of stocks, exchange traded funds (ETFs) and other investment tools to generate enough yearly income to sustain a certain lifestyle.

Emily Brandon of U.S. News & World Report states the following things need to be considered when determining if you are saving enough for retirement:

• The amount you plan on spending during retirement
• The type of lifestyle you plan on living in your leisure days
• Inflation
• What other sources of income you may receive
• Your risk tolerance now and what it will be in retirement
• What you assume your rate of return on your assets will be.

The aforementioned factors will vary from individual to individual, as will the amount on which one will need to retire.  In regard to assessing risk tolerance, it is all about one’s risk appetite.  In regards to preserving one’s nest egg, the following should be considered:

• Don’t allow emotion to drive your investment decisions
• Stay diversified and use cost-effective investment tools such as ETFs
• Always have a strategy; we watch the trend lines and follow the 200-day moving average
• Have a stop loss in place in order to protect yourself

One thing to keep in mind is that you are the ultimate controller of your portfolio’s destiny and you drive its fate.

For more stories on retirement, visit our retirement category.

Kevin Grewal contributed to this article.

Tags: ETF 101, Retirement, Trend Following