Retirement planningRetirement planning is no slam-dunk. To make sure you retire in comfort, you have to start saving early and often. You need to pay attention to your money and not be distracted by the stresses and strains -- or the joys -- of day-to-day life. In the long run, you'll thank yourself for keeping one eye focused on the future.

To help you reach your retirement goals, here's a road map for navigating the decades as you move closer toward retirement age.In your 20s

If you save $6,000 every year starting at age 20 and earn just 5% in interest each, by the time you're 65, you'll have more than $1 million saved for retirement. While that sounds like a lot, considering inflation, it's not a fortune -- but it can be enough.

Other retirement planning essentials for 20-year-olds include:
  • Make paying your bills on time a habit.
  • Pay off your credit cards every month.
  • If you're offered a 401(k) at work, contribute at least enough to get the full match from your employer.
  • Open a Roth IRA, and ask your parents and grandparents to contribute to it instead of giving you holiday and birthday gifts you don't really need.
In your 30s

Life's pressures increase when you're in your 30s, but managing your retirement savings -- despite the multitude of demands on your money -- is an important goal. If you started saving $6,000 a year when you were 20, you'll have more than $75,000 in your retirement account by now. If you're only beginning to save at age 30, you'll have to up the ante. To have $1 million saved up by the time you're 65, you'll need to start socking away $900 a month (assuming you're earning 5% on your money).

Other important retirement planning steps include:
  • Aim to save and invest a minimum of 10% of your income; set up an automatic transfer plan to a retirement account to ensure that happens.
  • Consider adding bonuses, tax refunds, or other lump-sum payments to your retirement savings.
  • Consult with your spouse to make sure you're working together to maximize your retirement nest egg.
  • Devise a plan to invest your money in a smart way. Getting professional advice is always a good idea.
In your 40s

You're most likely halfway through your working life, so now's the time to get serious about retirement planning. If you've been saving steadily for 20 years, you're likely close to having $250,000 in your accounts, and maybe lots more if your employer has been contributing, too. But if you haven't been as diligent, you may never catch up. In order to save $1 million by age 65 -- if you're starting at age 40 -- you'll have to put away at least $1,700 every month and earn an average of 5%. That's more than $20,400 a year. While it isn't an impossible goal, especially if both you and your spouse work at it and your employers kick in some money, too, it won't be easy if you also plan to pay your children's college tuition.

Here are some other steps to take during this decade:
  • Review your investment plan. Consider putting your money in a target-date mutual fund that adjusts your level of risk for your stage of life.
  • Buy disability insurance.
  • Consider buying long-term care insurance now while it's cheapest.
  • Make a will and update your beneficiaries in conjunction with it.
  • Tell the IRS to deposit your tax refund each year into an IRA account.
In your 50s

Retirement is right around the corner. By this time, you'd better have a plan -- and some money in the bank. Saving is still important, so keep putting as much money away as you can. Even if you don't have as much as you'd hoped, don't give up. Every little bit you can sock away will help you during your retirement years.

Here are the important steps to take now:
  • Set a date for retirement and start planning around that date.
  • Review how your assets are invested. Now may be the right time to move some of what you have into more conservative investments. It's also a good time to seek professional advice.
  • Consider your situation at work. Some workers in their 50s are very vulnerable to job loss. If you think that might be the case with your job, plan for what you'll do if that happens.
  • Start a small business on the side -- like selling used golf balls or baking wedding cakes. Any enterprise that will keep you busy doing something you like and bring in income during your retirement is a winner.
  • If you haven't bought long-term care insurance already, now's the time -- before the price is out of reach.
  • Get rid of all your credit card debt. Having debt in retirement is a real drag.
  • Pay off your home. A paid-off mortgage will give you much more flexibility and greatly reduce your monthly retirement expenses.
In your 60s

You're almost there. You have a plan and you're ready to work it. Sixty is the new 50 -- many people are choosing to work later in life -- so you've still got some time to make critical decisions to ensure that you're ready to retire in comfort.

Here's what to do to finish your retirement-planning job:
  • Contact your employer's human resources department, and ask for help understanding any retirement benefits you can expect to receive.
  • Contact the human resources departments of previous employers as well to see if you're still entitled to pensions or other benefits.
  • Review your annual Social Security statement closely and, along with your spouse, devise a strategy for getting the most out of what you're entitled to. That might mean putting off getting your retirement benefits until age 65 or even 70.
  • If you're a veteran, investigate the benefits that might be available to you via the Veterans Administration.
  • Add up the value of all the income you can expect to generate in retirement, including calculating the withdrawal rate on your savings (plan for no more than 4% annually of your total).
  • Create a retirement budget. Project these costs, assuming a 3% annual inflation factor, through you and your spouse's 100th birthdays. People live a long time these days, and you want to make sure you have enough money to spend until the day you die.
  • Get some professional help reviewing your total retirement picture and devising ways to ensure you'll be financially stable as time marches on.
Congratulations! You've earned the right to enjoy the freedom to do what you want. But life doesn't stand still. Review your plan every year, and keep tweaking it to make sure your life is the best it can be.

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