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The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

By Richard Schmitt



) -- Now that the first Baby Boomers are turning age 65, more folks are setting their sights on driving off into their sunset years. Most have come to recognize that reaching a retirement rest stop sooner rather than later may require some adjustments to their current route. As you cruise into 2012, you would be well served to observe some safety driving tips to reach retirement on your terms.

Safe Driving Tip #1: Save Fuel

Cash is the fuel that drives your retirement savings. You just can't coast into retirement on an empty tank and expect to enjoy a life of leisure for very long. So the laboring part of your lifetime journey needs to sustain you not only now but also later beyond your working days. This is where saving comes into play. Efficiency comes from saving in tax-deferred retirement plans offering immediate tax savings on contributions and investment income as well as potentially free money in the form of a company match.

Safe Driving Tip #2: Hog the Road

Contrary to the usual rules of the road, you need to travel in more than one lane, and adjust as appropriate, on the adventurous road to retirement. When one lane jams up in traffic as stocks did in 2011, other lanes like bonds may be flowing more smoothly. Diversification of retirement savings among stocks, bonds, and cash, and continual rebalancing may allow a portfolio to lurch forward even when one asset class stalls.

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Safe Driving Tip #3: Watch What You Pay at the Pump

For other than car buffs, product consistency makes gasoline shopping come down to factors like a station's location and pricing. Despite upcoming new fee disclosure requirements, selecting funds worthy of an investment of your retirement savings requires a bit more thought and a lot of faith. You not only need to ascertain the quality of the alternative options but also their costs from researching fund prospectuses or other plan-related materials.

Safe Driving Tip #4: Pay Attention!

You need to keep your eyes peeled as you drive defensively down the road to retirement. Opportunities await you at every turn to make the most of your retirement savings. A buy-and-hold investment strategy no longer works in a stock market that has offered nothing but volatility over more than the past 10 years.

You can simplify your route to retirement wealth by investing in stocks for their potential pop and cash for its stability. Then take portfolio rebalancing to a new more frequent level - daily. Make once-a-day fund exchanges between stock and cash accounts so as to buy stock when the market is about to close lower and sell stock when the market is about to close higher. Taking only minutes a day, incremental purchases and sales of stock set up and capture lasting gains in retirement savings accounts, where trades do not trigger immediate taxes or direct trading costs. A disciplined 401(k) day trading approach beat the broad U.S. market (as measured by the S&P 500 index) by more than 25% over the 10-year period ended Dec. 31, 2011.

Stay tuned this week for a more in-depth look at how each of these safety driving tips can guide you down the road to a better retirement.

This article was written by Richard Schmitt, author of "401(k) Day Trading: The Art of Cashing in on a Shaky Market in Minutes a Day." Outside of his appearances on Fox Business News, KCBS, and Business News Talk Radio, he is an Adjunct Professor teaching retirement planning at the Edward S. Ageno School of Business at Golden Gate University.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.