Accumulation: Four Steps to Build Your Retirement Portfolio

Ready to invest for retirement? Learn a few simple steps to get a retirement investment portfolio ready for the road. Build your retirement investment portfolio
5 min read
Photo by Getty Images

Key Takeaways

  • Use the right retirement account for your situation
  • Contribute early and often if you’re able
  • Know your time horizon and risk tolerance and allocate accordingly

You know saving for retirement is important, but determining just how to build a retirement portfolio can be overwhelming for novice investors.

It doesn’t have to be. Investing for retirement really takes only a few steps to get going. But often inertia or uncertainty about how to take that first step keeps people on the sidelines. First, it’s vital to make a commitment to saving. After that we can transition from simply saving to investing in a retirement portfolio.

Four Steps to Consider

For many people, retirement is the main reason why they save, but they may have other goals, such as paying for a child’s college education, saving for a down payment on a house or car, or taking a big vacation.

For long-term goals like retirement, Tasha Matsumoto, senior producer of learning design and development at TD Ameritrade, says there are some basic guidelines long-term investors can follow while they’re accumulating retirement assets. She recommends four steps to build their portfolio (see figure 1 below).

  1. Set goals
  2. Allocate your portfolio
  3. Choose investments
  4. Manage your portfolio

FIGURE 1: A PEEK INSIDE A COURSE. The above screenshot is from the course Simple Steps for a Retirement Portfolio, available for free to TD Ameritrade clients. To access it, log in at and under the Education tab, select Education Center. The course is the first step in the path labeled "I want to build a nest egg for retirement." For illustrative purposes only.

An Account for Each of Your Goals

The first step is to define your goals and choose an appropriate account type for your goals. There are several tax-advantaged account types designed to help people save for retirement, such as employee-sponsored 401(k)s, traditional individual retirement accounts (IRAs), and SEP IRAs or solo 401(k)s for self-employed people. Roth IRAs, although not tax-advantaged on money invested today, allow returns to grow tax-free and are tax-free upon withdrawal.

For most of us, retirement is just one of several savings goals we pursue through the years, and for each goal, you might consider different accounts, account types and investment vehicles. For example, when saving for college, you have choices for setting aside, investing and and managing those educational funds. If you're considering a 529 Plan or Coverdell Education Savings Account, it’s important to know the rules and tax implications of each type.

For other, shorter-term goals, you might find that a brokerage account, with a wide range of investment choices geared toward different objectives and risk tolerances, is most appropriate.    

Once the accounts are established, the second step is to fund them, which is where the proper retirement portfolio allocation comes in. The decisions here come down to the individual person’s risk tolerance and time horizon, Matsumoto says. In retirement planning, time horizon and risk tolerance can be related. People with 25 years or more before they retire might attempt to achieve long-term growth by heavily investing in equities. But as they get closer to retirement, they should consider adjusting that allocation to a more conservative mix of stocks and bonds.

Invest. Rebalance. Rinse. Repeat.

The third step is choosing the investments that may be appropriate for your portfolio. When faced with investment choices, many investors feel overwhelmed by the many choices available. But to get a well-diversified portfolio, you don't necessarily need to make a lot of complicated decisions. 

With investments selected, the fourth step is managing the portfolio. As time passes, portfolios may drift, since one portion of a portfolio might grow at faster rate than another portion. It takes rebalancing on occasion to make sure a portfolio stays in line with an investor’s risk tolerance and goals, Matsumoto says.

Some things that can help, she says, are to contribute regularly, minimize taxes and fees, diversify, and keep your eyes on the prize—retirement—even if the market looks shaky at times.

Investing offers no guarantees, and the possibility of loss is real. But “the data shows historically the market has always gone up over time, so there may be benefits to staying invested for the long-term,” Matsumoto says. 

As you set about investing for your retirement and other goals, it might help to set a few ground rules for yourself. If you’re looking for some help, watch the video below, which lays out five simple rules of investing.   


Key Takeaways

  • Use the right retirement account for your situation
  • Contribute early and often if you’re able
  • Know your time horizon and risk tolerance and allocate accordingly
Call Us

Do Not Sell or Share My Personal Information

Content intended for educational/informational purposes only. Not investment advice, or a recommendation of any security, strategy, or account type.

Be sure to understand all risks involved with each strategy, including commission costs, before attempting to place any trade. Clients must consider all relevant risk factors, including their own personal financial situations, before trading.

All investments involve risks, including loss of principal.

Diversification does not eliminate the risk of experiencing investment losses.


Market volatility, volume, and system availability may delay account access and trade executions.

Past performance of a security or strategy does not guarantee future results or success.

Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Options trading subject to TD Ameritrade review and approval. Please read Characteristics and Risks of Standardized Options before investing in options.

Supporting documentation for any claims, comparisons, statistics, or other technical data will be supplied upon request.

This is not an offer or solicitation in any jurisdiction where we are not authorized to do business or where such offer or solicitation would be contrary to the local laws and regulations of that jurisdiction, including, but not limited to persons residing in Australia, Canada, Hong Kong, Japan, Saudi Arabia, Singapore, UK, and the countries of the European Union.

TD Ameritrade, Inc., member FINRA/SIPC, a subsidiary of The Charles Schwab Corporation. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2024 Charles Schwab & Co. Inc. All rights reserved.

Scroll to Top