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Rays take: Recently, we talked about Target Date Mutual Funds and how these preset funds could be an effective tool for your retirement. These funds have a particular mix that changes as you approach your projected retirement date. These can be good as long as you have researched the funds and determined if the mix meets your unique retirement goals.

Now, lets talk about choosing your own funds for your 401(k) plan. Going outside the box is a more involved scenario and one that can also be a great tool.

You will still need to have a retirement date in mind. But you need to look at how many years to expect after that magic retirement date. We always plan to live to at least age 95. That means that a retirement at 55 is very different from a retirement at 70.

You can review the various indexes and benchmarks to familiarize yourself with expected returns. Use this information to determine what indexes you wish to use in your portfolio mix. You should pay more attention to long-term returns, rather than recent performance. A 401(k) is a long-term investment.

Also, generally speaking, the younger you are, the more risk you can handle over the long term. If you are planning to retire in the near future, you will not want to put nearly as much of your money into higher risk categories, no matter how well theyve been doing recently.

There is no set way for any one person to set up their retirement accounts. The important part is to get a plan in place. The process really isn’t as hard or intimidating as Wall Street makes it seem, as long as you take the time to sit down and think it through thoroughly at the beginning. And using a financial planner can help you to navigate the murky waters.

Danas take: When I worked, we had to choose a fund in which to put our retirement dollars. I always used the dartboard method, and this isnt the best way to go about allocating dollars for retirement.

More recently, Ray helped my mother and my sister choose the funds for their 401(k) dollars. Once their current allocations had been reviewed, compared to where they wanted to be, and new allocations were chosen, their funds performed much better.

Their examples are a great argument for spending the money to consult with a CFP or seasoned adviser when choosing among retirement funds for your 401(k) dollars. With improved returns and compounded interest over decades, that could mean tens or even hundreds of thousands of dollars in potential gains.

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Watch Service ‘>Ray Brandon is a certified financial planner and CEO of Brandon Financial Planning (brandonplanning.com). His wife, Dana, has a bachelors degree in finance and is a licensed clinical social worker. Contact Ray Brandon at raybrandon@brandonplanning.com .