How to Create a Personal Retirement Plan

Your retirement plan needs to be aligned with what you need and want. "As a whole, retirement plans can never be one size fits all, because everybody is very different," says Ephie Coumanakos, co-founder and managing partner at Concord Financial Group in Wilmington, Delaware.

Finding the right retirement plan involves:

-- Thinking about your values and goals.

-- Identifying your risk tolerance.

-- Considering your age.

-- Projecting your retirement lifestyle.

-- Adjusting your plan as needed.

Follow these strategies to create a customized retirement plan that's best for you.

Understand What's Important to You

The ideal retirement can vary greatly depending on your priorities and goals. Think through what's meaningful for you and how you might want to spend funds. "Sit down with your spouse or loved ones and discuss what you would like to do in retirement," says Logan Allec, a certified public accountant and creator of the personal finance site Money Done Right based in Santa Clarita, California.

During the discussion, map out your values. Try writing down a list of your retirement priorities, such as charity, faith, family and interests. Then narrow down the list to several objectives that are the most important to you and your loved ones. This will help you shape retirement goals and get a realistic picture of how you might spend your time. If traveling is important to you, consider how much touring you would like to do in retirement. If you value living in a cottage on a lake, run the numbers of the cost of living in a location you have in mind.

[See: How Much Should You Contribute to a 401(k)?]

Set Some Retirement Goals

A generic estimate of how much income you'll need during retirement may not be accurate for your particular case. "Assuming you will need 80% of pre-retirement income because you will have less expenses in retirement is an incomplete estimation that does not take into account your individual situation," says Ken Van Leeuwen, managing director and founder of Van Leeuwen & Company in Princeton, New Jersey. Instead, think about what all of your goals will cost. Write down a list of expected expenses or work with an advisor to think through how much income you'll want annually. In addition to Social Security benefits, calculate the amount you'll need from other investments and sources to carry out your goals. You may find you'll be able to live on less than 80% of your current income, or you could realize you'll want additional income during your retirement years.

Think about the age you'd like to stop working. "When to retire is a personal decision," Allec says. Talk to your spouse or a loved one about when to step away from your current job. Also take into consideration your health and retirement plans. If you have an active retirement in mind, retiring early might mean you'll have more years of energy to fulfill your plans. However, keep in mind that retirement could last for decades. "It would not be unreasonable to expect to be in retirement for 30-plus years," Coumanakos says. Once you know when you want to retire, mark it on a calendar or in your office. "By scheduling your retirement, you are shifting that date from an aspiration to a plan," Allec says.

[Read: What Is the Average 401(k) Return?]

Know How Much Risk You're Comfortable With

Some investments come with high risk, meaning they may help your money grow quickly or you could lose a great deal. Lower risk investments often provide lower rates of return, but also reduce the chance you'll lose money. If you prefer lower risk, you might plan on a 3% rate of return on your investments. If you have a moderate risk tolerance, budgeting a 5% or 6% rate of return may work. "The risk tolerance of the investor has to come into play because that will define how much money someone needs to save each and every month," Coumanakos says.

You and your spouse may have different tolerances for risk, and one member of a married couple may prefer lower-risk investments than the other. If it's difficult to get on the same page, talk to an advisor about your comfort zones. A financial professional could help allocate funds in ways that provide a compromise so you can both sleep at night.

Factor in Your Age

If retirement is several decades away, you might try a 50/30/20 strategy. "Allocate 50% of your after-tax pay toward your needs," says John O'Rourke III, vice president at First American Bank in Coral Gables, Florida. Of the remaining income, 30% could go toward entertainment and 20% toward saving. And if you can, save more. "Young investors should save as much as they can possibly afford to now," Coumanakos says.

If you are within a decade of retirement, you might opt to save more than 20% each month to meet your retirement goals. For those who weren't able to save during their early working years, they may "have to now work past their projected retirement age to make up for the difference," Coumanakos says. Consider if you plan to continue working part time after stepping away from a full-time job. Bringing in some income during retirement could help you to get by with a modest nest egg.

[Read: A Guide to Vesting in Your 401(k) Plan.]

Reassess Your Retirement Plan Over Time

After setting up an initial retirement plan, revisit your budget each year and as you hit milestones. A wedding, new baby or job change could impact how much you save each month. "While building the physical plan is an important first step, the continuous review and maintenance of the plan is even more important," Van Leeuwen says.

As your life changes, you might also find your goals shifting. If you struggled with a medical condition but are now healthy, you could add more activities into a retirement plan. If you remarry after a divorce, your priorities might switch. "What may be true today may not be in the future," Van Leeuwen says. "It is important that your plan is updated as material changes occur in your life."