There's no way to put a positive spin on what happened to most investors' retirement portfolios in 2008 and early this year. Simply put, the losses were brutal, and in some cases ruined long-held retirement plans.

There's no way to put a positive spin on what happened to most investors' retirement portfolios in 2008 and early this year. Simply put, the losses were brutal, and in some cases ruined long-held retirement plans.

Yet if there's any consolation to be taken from the past 18 months, it's that many people now pay more attention to their total financial picture — not just stock and bond investments, but saving and spending habits as well.

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"There's no silver bullet that can undo what happened last year," said Richard Hisey, president of AARP Financial Inc. "There's no guarantee (that losses won't happen again) but that's no reason to not take steps (to improve finances)."

There are basic financial measures that all investors should be aware of, Hisey said, such as being disciplined about spending and keeping a watchful eye on an investment portfolio's asset allocation.

"If anyone takes an objective look at their finances and how they can improve them, it's surprising how [much] they can make improvements by having a budget and sticking to it," Hisey said.

"People don't have time to focus on their saving as much as they should," he added. "By keeping the message simple and encouraging work on basic things, it's easier to get through."

As the new year approaches, here are some steps to get your finances back on track:

1. Be practical. Inventory all of your assets and liabilities and take it even further by looking at the different types of liabilities. Use some assets — savings in a cash account that yields practically zero, for instance — to repay certain types of debt, such as the balance on a credit card that's charging 15 percent interest a year.

2. Revisit retirement goals. For many people, retirement means days of fishing or playing golf, or lying on a beach sipping cocktails. In truth, it may be time to shelve those dreams and prepare for a retirement that includes some sacrifices.

This realization can be difficult for baby boomers, who often have a disconnect between how they envision retirement and how they've actually prepared for it, Hisey said.

For example, you might have to move to a smaller house or apartment. And many people at retirement age will have to accept that they'll still be working, if only part-time, Hisey said.

3. Don't ignore inflation. The impact of inflation on a nest egg is difficult to grasp, especially since inflation lately has been relatively tame.

One way to imagine the sting of inflation, Hisey said, is to compare what basic goods and services cost a couple of decades ago with their prices today. Gasoline is a good example, Hisey said: "Remember when you paid less than $1 a gallon for gas, and then think about paying $4 a gallon recently."

4. Save, save, save. It's often-quoted advice, but saving as much money as possible — and starting early — can make a huge difference in the quality of your later years. Some investment companies recommend stashing away 10 percent or even 15 percent of gross salary, but Hisey didn't want to put a set number on it. Even 2 percent, if that's all one can afford, should be set aside — but always with a view to increasing that amount.

5. Be smart about insurance. Get strategic about what insurance to take and when to take it. For instance, for a younger person with a young family, full life insurance makes sense. But once the children have left and are making their own money — and as the infirmities of old age creep in — it might be worth drawing down the life insurance and increasing disability insurance so that illness doesn't mean the loss of income.

There's also the matter of having the right type of insurance. Hisey spoke of one family whose house burned down who turned to their insurer only to discover that their insurance payout had a limit. The family was forced to tap retirement savings to buy another house.

"People should look at their finances the way companies do," Hisey said. "There are assets such as hard assets and also human capital — the value of your work — and you need to protect those assets. Look as hard at your insurance portfolio as you would your investment portfolio."

6. Don't let panic dictate investment choices. Last year's losses have led many investors to change their asset allocation and diversification strategies. In some cases, this is the result of deliberate decisions taken in light of the changed market. But all too often it's the reaction of a panicked or fearful investor.

Regardless of what the market is doing, sticking with an allocation that matches an investor's principles, especially when it comes to risk, is most important, said Hisey.

7. Get help if you need it. AARP encourages investors to work with financial professionals when it comes to making their financial and investing decisions. The organization believes these professionals can provide valuable guidance, particularly in times of crisis.

"Make sure you find somebody you can trust," Hisey said. "It should be a relationship like the one you have with your doctor — get second opinions if want them and keep asking questions. If they can't explain things in ways that you understand, move on."