Whether they’re near to retirement or still some years away, many investors have one prevailing fear. Once they stop working, there won’t be enough income coming in.

This underlines the fact that retirement investing should begin well before you approach retirement age. And there is a plan you can adopt during your working years that is particularly effective in smoothing the path to retirement.

Retirement investing: Dollar-cost averaging brings automatic profits

The best retirement plan you can have is to start saving as early in your working career as possible. You then invest a steady or rising amount of that money in the stock market every year. When you follow this plan, you automatically profit from dollar-cost averaging. You will automatically buy more shares when prices are low, and fewer shares when prices are high.

In retirement, you reverse the process. You live off your dividends, and sell stocks only when you need more money. When you do that, you sell your lower-quality holdings first. That way, your sales have the added advantage of upgrading the quality of your portfolio.

Of course, you can improve your returns and cut risk if you structure your retirement investing around our three-part approach at TSI Network. Invest your money mainly in well-established, dividend-paying companies. Spread your investments out across the five main economic sectors (Manufacturing & Industry, Commodities & Resources, the Consumer sector, Finance, and Utilities). Downplay or avoid stocks in the broker/media limelight.

That limelight tends to push up investor expectations to unrealizable levels. When unpleasant surprises come along, they can have a brutal impact on prices of stocks in the broker/media limelight.

Don’t let your retirement investing be distracted by the direction of the stock market

The funny thing about this financial plan is that you can actually make it less effective if you try to improve it. For instance, you may decide to vary how much money you invest every year, depending on your view of the market outlook. And that’s likely to cost you money at least half of the time.

If you invest more money in years when you’re confident about the economy or market, you may wind up buying more shares when prices are high. If you cut back on your investing in years when the outlook is uncertain, you’ll buy fewer when prices are low.

In the course of your investing career, you’ll make some good guesses about market direction, and some bad ones; overall, they are likely to average out. That’s why it’s best to keep to your plan no matter what the market does. It’s much easier to spot high-quality investments than it is to try and predict the next shift in the direction of share prices.

This plan is virtually guaranteed to produce great results for you, if you start early and stick with it. However, few investors do that. Many investors simply run into too many ways to get sidetracked, and fail to stay with that steady—and successful—approach.

If you’d like me to personally apply my time-tested investment advice to your portfolio, you should consider becoming a client of my Successful Investor Wealth Management service. Click here to learn more.