About to retire? How to give your investments a checkup

During your working years, you're supposed to do your best to sock away money in an IRA or 401(k) plan. But that money shouldn't just sit in cash. Rather, you should invest it for growth.

The same applies during retirement. Once you stop working, you should plan to keep your IRA or 401(k) invested so it continues to grow (though it's wise to retain a portion of it in cash, in case market conditions take a turn for the worse). If you're on the cusp of retirement, here are a few important moves to make with your investments.

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1. Check your asset allocation

The right asset allocation could spare you serious losses in the event of a stock market crash while helping you maintain steady growth in your IRA or 401(k). As retirement nears, you'll want to make sure you have a nice mix of stocks and bonds in your IRA or 401(k). You'll need stocks to continue generating growth, while bonds will serve as your safety net, providing some amount of interest income.

How much of your portfolio should you keep in stocks versus bonds? That decision will boil down to a few different factors -- namely, your personal appetite for risk and whether you have significant income sources outside your IRA or 401(k). But assuming your retirement plan will be your primary income, you may want to kick off retirement with about 40% to 60% of your assets in stocks and the rest in bonds. You can adjust that percentage based on your risk tolerance.

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2. Make sure you're diversified

Splitting your assets between stocks and bonds is a good way to diversify, but you'll also want to diversify within each of those specific classes. For example, if you own individual stocks in your IRA, you'll want to make sure they're spread out across a number of different market segments. If they're not, you may want to shift them before your retirement kicks off.

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3. Pay attention to fees

Investment fees can eat away at your returns, which is a problem when you're trying to both grow and maintain wealth. That's why it could pay to move away from actively managed mutual funds as retirement nears and replace them with index funds. Index funds track existing market indexes, like the S&P 500, and aim to match their performance. They also tend to charge much lower fees than actively managed funds, since you're not paying for the expertise of a hands-on fund manager. Index funds routinely outperform their actively managed counterparts, so if you go that route, you won't necessarily lose out on returns in the process.

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Give your investments the attention they deserve

The investments in your IRA or 401(k) could be just the thing to get you through retirement -- so don't neglect them. If you're nearing retirement, give those investments a thorough look and make changes to set yourself up for success. A little effort in the near term could put you in a better position to enjoy your senior years to the fullest.