3. Choose dividend payers for peace of mind

It's easy to plan on riding out market downturns, but it can be hard to stick to that plan. Once you see your portfolio balance take a big hit, you'll naturally want to do something, anything, to stop the losses.

Dividend-paying stocks and funds can help you stay the course in those tough times. Why? Because the good ones keep sending those quarterly payments no matter what's happening with share prices. You're not going to sell off those dividend payers in a panic if they're the only positions working for you. And hopefully, the income can pacify you enough so you don't panic-sell other positions either.

Look to invest in a dividend-paying index fund rather than individual companies. A fund is already diversified and easier to manage over time than a bunch of individual company stocks. One to look at is the Vanguard High Dividend Yield Index Fund (NASDAQMUTFUND: VHDYX) which tracks the FTSE High Dividend Yield Index.

The equities in your S&P 500 index fund or a dividend fund are great for growth and income, but they can be volatile. If you're in the early years of retirement saving, you may not mind a little volatility. But as you get older, it's important to moderate that volatility with assets that are more stable in value, like bonds or bond funds.

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Retirement Savers: 4 Easy Investing Strategies to Implement Now - SCNow