4 Financial Tools that Can Make or Break Your Retirement

A safe and secure retirement is a key part of the American dream. We work hard, long hours to provide for our family, in the hopes that one day we'll be able to embrace our passions and live life totally on our terms. But, the path to financial prosperity is laden with landmines and other obstacles that threaten even the best laid plans.

Thankfully, for every obstacle, there's also an opportunity to create a strong return on the investment of our retirement dollars. The tools outlined below help anyone navigate life's ups and downs without sacrificing long-term financial security. In a world rocked by recent memory of the Great Recession, an investment in peace of mind pays huge dividends.

1. The Dangers of the Payment Lifestyle

For most Americans, cash-flow is the most valuable asset in their life. As Robert Kiyosaki, the author of Rich Dad Poor Dad once said, "It's not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for."

If your money is going to credit card payments, car loans and a mortgage payment, the tiny sliver of your remaining at the end of the month isn't enough to supercharge your retirement savings. Take on your debt and pay off outstanding balances, with a commitment to avoiding future debt.

2. Battling Legal Fees and Other Unexpected Expenses

An emergency fund, containing at least six-month's worth of expenses, is the cornerstone of financial health. Avoiding debt in an emergency, and banking on yourself, will help you to stay on track financially.

If you do find yourself facing an unexpected legal battle, work with a professional to find a payment solution that avoids up-front costs. According to Hughes and Coleman, "...the system of lawyers fronting the costs of litigation and collecting nothing if they fail has enabled millions of people in the U.S. to get justice and compensation who may have otherwise been unable to do so."

And for other instances of unexpected payments coming due, reach out to the person or company on the other side of the payment. Find out if they'd be willing to work out a payment plan, to help you avoid the necessity for taking on debt, or decimating your emergency fund in the short-term.

3. Invest in a Diverse Portfolio

The average American should be saving at least 15% of their income in a retirement account, preferably with a tax advantage. Tax advantaged accounts, like 401(k)'s and IRA's, grow tax-free with the regular addition of pre-tax dollars. This is powerful! And, if your employer offers a matching option, make sure you aren't leaving money on the table!

Part of a diverse portfolio should include stocks, mutual funds, bonds, real estate and even short-term options. For example, the history of the binary options market shows that there are a variety of ways to supercharge your net-worth. Investing a small percentage of your retirement savings in an actively managed portfolio that includes options will help your portfolio take advantage of short-term opportunities, while relying on the safety and security of your traditional investments.

4. Pay off Your Four Walls

Your home can be a great asset. Families that purchase a home, avoid moving for at least 10-20 years, and make extra payments to pay off their mortgage quickly can enjoy a much brighter retirement.

Remember how I mentioned that payments can be the death of a good retirement plan? Well, for many families, a home is their largest monthly payment.

Work hard to pay off your mortgage quickly. Early payment can save you more than $20,000 in interest fees and other long-term mortgage charges. And remember, a home is a living, breathing entity. It needs constant maintenance and repairs. Setting aside a portion of your budget to cover these expenses is a great way to avoid unnecessary debt when disaster strikes.

If you're wise with your income, setting aside enough to fund your retirement and minimize debt, a prosperous retirement is yours for the taking. Don't let the allure of "Easy, interest free payments" draw you into unnecessary purchases. Those payments will chip away at your cash-flow, hurting your ability to make retirement contributions. Proper planning and execution of a retirement plan (it's never a bad idea to sit down with a financial advisor) will fuel your retirement and provide peace of mind.