Whether you have years until retirement or it is right around the corner, now is the time to consider how you are going to fund your twilight years. With retirement planning, it is advisable to diversify your investments and income sources so you are prepared for whatever retirement throws at you. Consider these three techniques to ensure your retirement plan has ample diversification.

Purchase an Annuity

When purchasing an annuity, you can select an option that suits your income needs and personal comfort level.

1. Fixed Annuity

A fixed annuity provides regular payments to the purchaser for the duration of the retirement contract. Investing in a fixed annuity is a great alternative if you prefer the security and peace of mind associated with a steady income stream. The amount that you receive does not fluctuate based on the performance of the stock market.

2. Variable Annuity

Variable annuities offer an annual payment that varies. Generally, the amount of the payment is tied to the performance of the stock market. You receive more money when the stock market is up and less when it is down.

3. Variable Annuity with a Minimum Return

A variable annuity with a minimum return takes top characteristics of fixed and variable annuities and combines them. With this option, you are guaranteed to receive a certain payout. However, if the stock market has a fantastic year, your payment will increase. If the stock market tanks, you still receive your minimum payment.

Invest in a Roth IRA

If you are looking to diversify your tax situation in retirement, fund part of your retirement savings with a Roth IRA. As of 2016, you can save $5,500 each year in a Roth IRA if you are under 50 years of age. Individuals over 50 years of age are able to save $6,500 each year.

Contributions to a Roth IRA are made with 'after tax' dollars. This means that you pay income tax on your contributions now rather than in retirement. When you retire and take distributions, you do not have to pay income tax on the money that you withdrawal. 

If your retirement portfolio consists of tax deferred options, such as a 401(k) plan, adding a Roth IRA helps diversify your tax situation in retirement.

Pay Your Mortgage Off 

One way to prepare for retirement is to decrease your monthly expenses. Paying off your mortgage ahead of schedule is a terrific option to lower your monthly expenditures. With lower fixed expenditures, you need less money every month.

Another benefit of paying your mortgage off early is that your money is guaranteed a specific return. For example, if your mortgage has an annual interest rate of 5 percent, prepaying your mortgage always provides this return on your money.

You can use a combination of savings, regular income streams, and decreased expenses to survive and thrive and retirement. Plan your retirement now by adding different means of retirement preparation to your financial plan.