To see if your retirement plan is on track, an assessment of your savings/spending rates comes first. The calculus about whether you are on track depends on whether you are still accumulating assets for retirement or if you are already retired and withdrawing money from your account.

The next step is to find the best account types for your hard-earned retirement dollars, then gauge the reasonableness of your portfolio's stock/bond mix, taking into account your spending needs and life stage as well as your personal financial circumstances.

But how best to populate your retirement portfolio or decide which of your current holdings are a good fit? To help you knock those tasks off your list, it is crucial to think through your own situation, what you are trying to achieve, and your characteristics as an investor. As you do so, here are the key questions to ask.

Choice 1: Is it better to employ multi-asset funds or discrete holdings for stock and bond exposure?
This is one of the first forks in the road that confront many investors saving for retirement: Hand-select investments, or opt for an all-in-one vehicle that encompasses varying asset classes, such as an allocation or target-date fund? Here are the pros and cons of each tack.

Employ discrete stock, bond, and other holdings
Pros: The big advantage of using a building-block approach versus employing an allocation or target-date fund for your retirement portfolio is that you can exert tighter control over your asset allocation. The stock/bond mix can be customized to suit any situation. Some investors may also value the ability to make tactical adjustments to their asset allocations based on their market outlooks—raising cash when long-term assets seem expensive, for example. And while multi-asset funds will typically assemble a portfolio from the "house" brand of mutual funds, the investor who maintains discrete stock/bond holdings is free to graze across fund families. Finally, retirees who maintain discrete stock/bond holdings can also be strategic about which part of the portfolio they tap for living expenses; they can sell stocks in a lofty market, for example, while harvesting bond and cash assets in tough equity markets.

Cons: A retirement portfolio with distinct holdings will require more work to set up and maintain. Moreover, investors who are in charge of maintaining their own portfolio mixes may be more inclined to make adjustments to their programs, and those tweaks will not always be well timed. For example, in the wake of the bear market, many investors bought bond funds, whereas in hindsight it was a wise time to buy stocks. (In fact, many all-in-one funds were rebalancing into stocks during that period.)

If an investor goes this route: They should seek professional advice on asset allocation, either from a financial planner or by taking time to learn about asset allocation on their own. And they should be careful with tactical maneuvers, as even professional money managers have difficulty executing them on an ongoing basis.

Opt for a multi-asset fund
Pros: Convenience. Employing multi-asset funds, whether a static-allocation vehicle or a target-date fund, can help reduce the moving parts in a portfolio. Moreover, target-date funds do the heavy lifting of asset allocation on their own. Not only do they set an initial, age-appropriate allocation, but they also manage it on an ongoing basis, making a portfolio more conservative as the goal date nears. Using a set-and-forget-it multi-asset fund can also help ensure that investors make changes that are psychologically difficult but helpful to the bottom line—for example, rebalancing.

Cons: Multi-asset funds may be reliant on a subpar lineup of underlying investments or may at least have a few weak links in their lineups. Nor are they usually appropriate for the tax-conscious: All but a handful of multi-asset funds are geared toward investors in tax-sheltered accounts. And as useful as they can be for retirement savers, target-date funds are blunt instruments: They use a single factor—anticipated retirement date—to set their asset allocations. But people retiring in a given year might have wildly different situations that call for different asset allocations: The person retiring in 2022 with a $3 million portfolio almost certainly has different needs than the one retiring in that same year with $250,000. There are some situations when off-the-shelf asset-allocation guidance will not cut it.

If an investor goes this route: They should be selective. Also, they should be sure to monitor other accounts they hold in addition to the target-date fund, because the allocations they make there can undermine what is going on in the target-date fund.

Choice 2: How much attention should be paid to tax efficiency?
In contrast with the decision about whether to hold discrete stock and bond holdings or steer money to a multi-asset fund, determining whether to pay attention to tax efficiency for a retirement portfolio is more straightforward. If an investor holds assets in a taxable account, it is wise to pay attention to tax efficiency because they can improve their take-home return. But if an investor holds their assets in a 401(k) or IRA, tax efficiency should not concern them at all: Growing their nest egg as large as they can is the only thing they need to worry about.

For investors concerned with tax efficiency: Focus on securities that give a level of control over when capital gains—and, to a lesser extent, dividends—are realized. On the short list of securities that fit the bill are individual equities, tax-managed funds, and broad-market equity exchange-traded funds and index funds. Try to minimize the role of investments whose income gets taxed at your ordinary income tax rate, such as bonds and REITs; municipal bonds will often to be a better fit for income seekers.

For those investing via a tax-sheltered account like an IRA or a 401(k): These investors can invest in all the highly taxed investments they would like, because the only taxes they will pay will be when it comes time to withdraw your money. No one is keeping track of all the dividends and capital gains racked up during your holding period but never paid taxes on; instead, traditional IRA/401(k) investors will owe ordinary income taxes on the amounts they pull out. (And Roth investors will not owe any taxes at all on qualified distributions.) Thus, investments with high year-to-year tax costs such as high-yield bonds, REITs, and fast-turnover equity funds (to the extent that they are held in a portfolio) are a good fit for tax-sheltered accounts.

Choice 3: Is it better to dampen volatility in a portfolio or be more aggressive?
Another consideration for investors when selecting holdings for their portfolio is the level of volatility they are comfortable with. The past 10 years in the equity market—and the 10 years that preceded them—have provided a great laboratory for examining one’s own behaviors. If an investor reacted poorly to market volatility—by selling out of positions when they were in a trough, for example—they may want to tweak their portfolio and its holdings to emphasize downside protection. On the flip side, if they know that they can handle higher volatility if the prospect of higher returns comes along with it, they might consider shading their portfolio toward the aggressive.

For investors aiming for a lower-volatility portfolio: The main way to bring a portfolio’s volatility level down is to adjust its asset allocation, but investors can also reduce their portfolio’s ups and downs by focusing on investments that take a risk-conscious approach to a given asset class.

For investors who can tolerate more volatility: Investors who have been stoic through the market’s gyrations may want to tweak their portfolio—both its asset allocation and their investment selections—to put a greater emphasis on investments that have the potential for higher long-term rewards, even though they come with higher volatility.