NEW YORK (CNN/Money) - I'm invested primarily in growth-oriented mutual funds since my investing time horizon is longer than 10 years. When I get closer to the point at which I will need to start withdrawing money from my portfolio, how do I start the process of transferring my money into less risky investments?

-- Ray, Montgomeryville, Pennsylvania

Ray, I don't know anything about you other than what you've asked in your question and the fact that you live not too far from my home town of Philadelphia (Go Iggles!), which, it goes without saying, is a plus.

But I have to tell you that I think the fact that you've asked this, and the way you've asked it, speaks well of you as an investor.

For one thing, this question shows that, far from being mired in the day-to-day cacophony of the markets, you are thinking ahead. That's always a good sign.

And I love the fact that you refer to "the process" of transferring money into less risky investments. Too many people think of investing as a reaction -- a reaction to stock prices going up or down, or to interest rates rising or falling or to the latest hot investment someone's touted on TV. But smart investors know that investing really is a long-term process that requires thinking ahead and a plan.

Now, back to your question. As you've suggested, adjusting one's portfolio from the "accumulation" phase to the "income" or "drawdown" phase is a process, but that doesn't mean that there is only one right way to do it.

Some investors might prefer to go from an aggressive to more moderate portfolio in a variety of stages over many years. Others might prefer a more abrupt transition. Still others may look to specific investments that can help them make this transition.

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Many mutual fund families, for example, offer "lifestyle" funds that gradually shift their allocations over the course of many from mostly equities to mostly bonds, saving you the trouble of having to do this. So there are any number of ways to go about this transition.

And, being the opinionated guy I am, I have my own views on this. My feeling is that, when it comes to investing for long-term goals like retirement, we don't need to do a lot of fiddling with our portfolio on a year to year basis.

That's because, whether you're just starting out in your career or getting toward the end of it, your investing time horizon is still pretty long. Yes, when you're 65 and ready to begin pulling money out of your portfolio, that fact alone argues for a less aggressive stance than when you're a whiz kid ready to remake the corporate world. But it's not a reason to batten down the hatches in bonds and money funds only.

On average, a 65-year-old is expected to live another 20 years or so. And that's on average, which means many will live much longer. So even when you're in the beginning stages of retirement, you've got many years of investing ahead.

So given that view, I think our portfolio allocations for long-term goals like retirement should reflect a few major stages in our life.

The first stage is starting out. When you're just beginning a job or starting a family, your main investment goal is growth: you want to expand the purchasing power of your money. To me, that means investing something like 80 percent of your portfolio in stocks and the rest in bonds. (You also need a short-term cash cushion equal to three-to-six months of your living expenses and you may have to invest differently for other goals like buying a house or funding the rug rats' college. But I'm talking about your long-term money here.)

You can dial the stock portion up or down a bit depending on how comfortable you are seeing your portfolio's value bounce around, but your allocation should be something along those lines.

I'd say the second stage is mid-career. You've been working 20 to 30 years, you're in your 40s or 50s and, if you've contributed to your 401(k), saved outside tax-deferred accounts and invested wisely, you've accumulated some bucks. You still need long-term growth, but at the same time you don't want to take too much risk with the nest egg you've been able to accumulate thus far.

So at this point, you might want to take a slightly less aggressive approach, perhaps scaling your stock position back 10 percentage points or so, or to 70 percent if you were previously at 80 percent. Again, the specific number can vary depending on your situation and risk tolerance. But the idea is that at this point in your life you might want to reduce the volatility of your portfolio a bit.

On the other hand, if you haven't been a good saver or the markets haven't been kind, you may not be able to afford the luxury of dialing down the risk, in which case you may need to stay closer to your original allocation in order to accumulate sufficient bucks for later on.

The third stage is when you're ready to retire. At this point, you want to be a bit more careful with your investing stash; after all, it's not as if you can make up for losses by saving more from your earnings. But at the same time you need to have growth in order to maintain your standard of living in the face of inflation.

Which means you still need a good helping of stocks; bonds alone aren't going to cut it, unless you've got a lot of income coming in from Social Security and pensions or you've saved so much money that you can live comfortably off bonds' lower long-term returns. (To get an idea of how hard this is to do, check out the T. Rowe Price Retirement Income Calculator and run a few scenarios using the bond-and-cash-heavy portfolios.)

At this point, I think most people would need to dial back their stock allocation another 10 percent or so, bringing it to about 60 percent. This should give your portfolio enough oomph, but offer a bit of short-term protection.

Another thing you may want to consider at this point is whether you have enough assured sources of income such as Social Security and pensions to provide some underlying stability in retirement. If not, you may want to consider an income annuity. For more on that option, click here.

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The fourth and final stage is late retirement. You're in your 80s and the last thing you need is to be worrying whether a market setback is going to wipe out the portfolio you're depending on for income.

At the same time, though, it's important to remember that it's not uncommon for people to live well into their 90s these days, or even hit the century mark. So it's not as if you should be investing as if your portfolio needs to last just a few years. In this stage, I'd say most people should be thinking of a stock allocation of 40 to 50 percent, although, again, that will vary depending on your situation.

So how you make the transition from one stage to another? I'd say you should give yourself about five years so you can gradually go from your old allocation to your new one.

One reason you want to do this a bit at a time is to avoid as much as possible generating taxes in taxable accounts. To the extent you can shift your allocation by diverting new money into the asset class you want to bulk up -- bonds mostly -- you avoid a tax hit.

A gradual approach also allows you to take advantage of other situations. Maybe you have a few stocks or funds that have proven to be dogs. You can unload them, perhaps at a loss, and reinvest the proceeds to get you closer to your new portfolio mix. For that matter, you may have some holdings that have done so well that further upside potential seems limited. You can take some profits and buy more of whatever asset class you need. If possible, do this in a 401(k) or similar tax-advantaged account to avoid a tax hit.

Finally, assuming you rebalance your portfolio annually to prevent one asset class from becoming too large (or small) a portion of your holdings, you can always use your annual rebalancing act as a way to bring your portfolio where it needs to be for your next life stage.

Is a five-year period sacrosanct? Of course not. It just seems like it's a short enough time so you can gauge progress toward your new portfolio look, yet give you enough flexibility to make the adjustments in a reasonable way. If you pull it off in three years, fine. If the process stretches to six years or seven, no biggie.

The important thing is to have a process in mind when you start this exercise. But I can see you already know that.

Walter Updegrave is a senior editor at MONEY Magazine and is the author of "Investing for the Financially Challenged." He also answers viewers' questions on CNNfn's Money & Markets at 4:40 PM on Monday afternoons.