There are many online retirement calculators available that can begin to give you a picture of the current condition of your funds as well as an idea of how much more you need to save before reaching your target retirement age. Yet most of these calculators' value ends there. How do you know if the retirement vehicles you are invested in are the best ones? What other vehicles might be better for you?

Know your goal. Knowing your target goal of how much cash you will need at retirement is the first step. Very simply, take your current gross income and deduct the expenses you no longer expect to have in retirement such as payroll taxes, the amount you are currently putting away for retirement, college funds (if your kids are already through), and mortgage payments (if your house will be paid off by retirement). That budget will create the framework for interpreting whether your current funds are sufficient.

Estimate your Social Security benefits and other sources of income. Utilize Social Security Administration online calculators to create a ballpark estimate of the monthly payment you might expect. Then think about other sources of fixed income such as company pension payments, for example, and add them to the tally.

Basically, by (1) finding your target retirement income and then (2) subtracting the estimated income from Social Security and any company pension, you will have the "magic number" of how much your personal retirement savings must contribute to your retirement income. From there, we move on to analyzing how your retirement savings are allocated.

Analyze which financial vehicles are best given your retirement road map. Many people who were approaching retirement last year were overinvested in equities. When the market crashed in March 2009, equity prices fell 57% from the market's peak in October 2007. Retirement balances fell $2.8 trillion, a full $1 trillion of that from baby boomer's accounts (Source: Huffington Post, 2010). While the magnitude of those losses is rare, it reinforces two general retirement investment principles:

• Diversification is king. Being overinvested in any one area isn't wise. Blending stock and bond investments, large-cap and small-cap funds, and foreign with domestic choices can offer the best balance between risk and reward.

• Appropriate asset allocation depends on your life stage. Generally, the younger you are, the larger share of your money should be in growth investments like equities. As you near retirement, transition into income-generating investments like bonds. (And while many people need both income and growth investments during retirement, the decreasing-risk rule still holds -- and there are a number of less-risky growth investments available.)

Once you know your goal, understand your retirement income and expenses, and have committed to diversification, then at that point it is a great time to review your retirement investments.