I got to thinking the other day about how silly it would be if people approached the weather the way they approach their investment decisions. Here's how it would work.

A few rainy days would come along. The news would run a story that said something like "Most Rain In One Day In Last 5 Years". The commentators would begin saying, "Yards and travel plans devastated by rain. What should you do now?" Umbrella and sump pump sales would soar. About this time, the rain would subside, and the sun would come out. The problem is, no one would get to experience the sunny days, because they would be hunkered down hiding under their umbrellas just in case a new rain cloud should come along.

And this, my friends, is exactly how many people invest. When turbulent times come along, they put their money in something that often locks them into walking around under an umbrella for five to ten years. They miss years of sunshine.

There's a better way. It involves creating an investment plan that you can stick with. You can do this with an asset allocation plan designed for retirement. There are a few ways to approach this, and I cover three of them in 3 Ways to Construct Your Asset Allocation for Retirement.

Today I had the pleasure of having a cup of coffee with Michael Kitces. Who is he, you ask? Well, when he does speaking presentations his name looks like this, "Michael E. Kitces, MSFS, MTAX, CFP^®, CLU, ChFC, RHU, REBC, CASL, CWPP^TM." Yes, those letters really all belong behind his name.

Michael has a newsletter for financial advisors called The Kitces Report, where he deep dives into the academics behind things like reverse mortgages, Social Security, P/E ratios and withdrawal rates, life insurance, and much more.

I asked Michael what the single most important thing someone about age 55 today could do. With his background, I was expecting an academic answer, and so his response surprised me. He said the single most important thing one can do is define what retirement means to them. He went on to explain that you do this by asking yourself "What would your life look like if you no longer had to rely on the work you currently do for income? What would you do with your time?"

This led to an insightful discussion on how different types of people answer this question. I'll be sharing more of this discussion when I have more time. In the meantime, your homework is to take out a journal, or catch up with your spouse or a good friend, and ask yourself "What does retirement mean to you? What would your life look like if you no longer had to rely on the work you do for income?"

If you so desire, I'd love for you to post your answer in the comments below, or read other answers and respond in Readers Respond: What Retirement Means to You.

I don't know about you but for me the unknown is a lot worse than the known. When something is unknown you can make up all kinds of stories in your head about what is really going on. Once something is known you can lay out an action plan.

I don't think everyone looks at things this way though. If they did, more people would do financial planning and retirement planning. I think people don't do it because it's scary and they are afraid the plan may show them bad news.

Well, I'd rather have known bad news than an unknown nagging worry looming around me! I experienced this recently. I've had an unknown hanging over my head since the middle of  August. It recently became known and I can't explain the relief I feel! No more wondering now. Once you aren't wondering or worrying about something it frees up a lot of energy to work on positive things.

So, how do you get started on creating a retirement plan and move the unknown into the realm of the known? When I look at all my articles on this topic, I still prefer one of the first ones I ever wrote. It contains the five most important things you can and must do when it comes to your retirement planning.

I grew up playing chess with my dad. The problem was, neither one of us really knew what we were doing. We'd frequently start a game, and three hours later there we would be each hobbling along with two pieces left, in a never ending stalemate. Nevertheless, we had fun.

Years later, I started playing a little more, and will never forget one brilliant game in which I managed to win in five moves. It was the highlight of my years of chess playing.

The thing about chess is playing against a live person is quite different than playing a computer. With a live person, you have to anticipate what you think they will do. If you are overconfident, and you anticipate wrong, the tables can turn quickly. You can end up looking the fool.

Overconfidence is a problem in chess and a problem in investing and retirement planning. It causes you to make decisions based on a belief about what will happen. What you need to do before you make important decisions, is stop and think about what you are basing the decision on. Then you need to ask yourself, what if you're wrong?

Overconfidence is just one of many aspects of a field of study called behavioral finance. The cool thing is when you take the time to study how you are wired to make decisions you can become more aware of why you do certain things, and you can learn to make better decisions.  One great book on this subject is Nudge.

Also like chess, when it comes to projecting your financial future over 20-30 years, there are a lot of moving parts. What will inflation do? What will the economy do? How long will you live?

You have a set of pieces at your disposal, and you need to learn how to use them in this game. Your pieces include your savings and investments, your knowledge of investment markets, the tax laws, your earning power, your own ability to learn how to use these pieces appropriately, and your ability to seek professional advice when it is needed.

Don't stalemate your retirement. Learn how to use your pieces.

Learn more: 4 Things You Must Know About Investing for Retirement