On the surface, retirement investing can seem simple enough. Invest in financial resources today for a regular income in retirement. Yet choosing exactly how you will invest takes a bit of thought. Determining the best ways to invest for retirement will depend on several factors, including your financial needs, time until retirement and lifestyle goals.

Here we will dig deeper into how retirement investment best practices can differ depending on your life stage and discuss some investment tips that could offer you value over time.

5 Factors to Consider in Choosing the Best Ways to Invest for Retirement

Should you invest in stocks, bonds or cash? Should you opt for mutual funds, exchange-traded funds or purchase an annuity?

Before saving and investing, think about how well a given investment would fit within your overall financial plans. It's important to remember that a good investment for now might not necessarily be the right investment for a later time. Every investment decision related to your retirement should take into account the following:

1. Your time horizon: How long it will be before you retire.
2. Your risk tolerance: How comfortable you would feel if an investment's value were to decrease in the short-term.
3. Your investment knowledge: Your understanding of and experience with investing and economics.
4. Your current financial needs: Your budget, emergency fund and debt repayment plans.
5. Your retirement lifestyle goals: Whether or not an investment fits within your plan to generate the income you will need in retirement.

How Your Age Can Impact Your Retirement Investing Decisions

The time between the start of your retirement investing and your planned retirement date is an important factor in choosing the best investments. The value of many investments, such as publicly traded stocks, fluctuates with the market, which can make certain investments higher risk.

Although stock values fluctuate in the short term, historically they rise over the long term. However, if you're in your late 50s and you're investing today to retire in a few years, a stock investment could lose value just when you start needing to withdraw money. On the other hand, if you're younger, with more years before retirement, the same stock could be a good choice for your retirement portfolio, as higher risks can also come with higher rewards.

Generally, the younger you are when you start your retirement investing, the more time your savings will have to grow and recover from the ups and downs in the market. That's why many young investors include a larger portion of high-risk/high-return investments than older investors.

The closer you get to retirement, the less risky or more conservative your investments should be. This is when you will likely want to switch from focusing on stocks to investing in low-risk securities, such as bonds — essentially lending your money to the government or "blue-chip," established companies. After all, you want to make sure you have money when you need it, and that's one reason why financial advisors suggest annual financial reviews to revisit your goals and needs and readjust your investment holdings if necessary.

Leverage Tax-Advantaged Retirement Accounts

Another point to consider in choosing how you will invest for retirement is which type of retirement savings account to use.

Employer-sponsored plans, such as 401(k) or 403(b) plans, let your money grow tax-free until withdrawal in retirement. You can also open a tax-advantaged account on your own with an individual retirement account (IRA), which gives a similar tax break to a 401(k) plan. You can save taxes on either the contributions or the withdrawals, depending on whether you get a traditional or Roth IRA plan.

All types of tax-advantaged retirement plans have contribution limits. If you exceed the contribution limit, you can always open a regular investment account, which is also an option to consider if you're an older investor trying to "catch up" with your savings.

In addition to stocks, bonds and cash, some insurance products also offer retirement savings benefits. Permanent life and whole life insurance policies often come with a savings component or cash value that you can withdraw or borrow against, and the policy might even pay dividends or interest depending on the plan. You can also purchase an annuity, which provides regular payments to you for a specified time period and comes in many shapes and sizes to suit your needs.

Create Your Own Unique Retirement Investing Plan

As you learn more about retirement investing, remember that general advice and suggestions may apply to your specific case, but no two situations are exactly the same. The ideal way to invest will always be unique to your specific financial needs and retirement goals, so consider speaking with a financial advisor to determine how you can start investing for a quality retirement.