You Can't Afford to Delay Retirement Planning

Unless you are very thrifty with minimal needs, you will require more than the government social security check when you retire. Extra cash could also fund a bit of travel or other activities to make your golden years more exciting.

Worry about having enough retirement savings is typical these days. But worrying doesn't seem to provide the motivation that many people need to create a retirement savings plan that will cover their needs. If you have been delaying facing the reality of retirement costs, now is the best time you will ever have to start looking after your future.

Your starting point for retirement planning should be to assess when you will quit working and what financial needs you will have then. Consider all expenses, including transportation, food, shelter, dental and medical, clothing, insurance, recreation, entertainment and whatever else fits. After deciding what your monthly costs are, add in a bit extra for emergencies.

Now that you know the retirement goal, waste no time in starting to get there. Make full use of the government's retirement savings investment programs. But if you can only afford a small contribution initially, that's a start that will build over the years. Decide exactly how much you can afford to salt away each month, and never waver from your commitment. If you do, it's a push away from the retirement goal.

Automatic deductions from your bank account could help to provide the savings discipline you need. Setting up the deduction to occur on payday will ease the pain somewhat, and eventually you will adjust to living on less.

If your company offers a retirement savings plan, take full advantage of it. This is essentially free money, so why not utilize it? The tax savings are substantial and allow you to have even more cash to invest.

Being short of money to for a monthly payment toward the retirement goal is not unusual, so here are some possible solutions:

* Plan to use part or all of overtime pay, bonuses, inheritance, tax refunds, or other non-salary income.

* Cut down on spending for luxuries.

* Create a monthly budget, then follow it strictly.

* Dine out only for very special occasions.

* Do as many jobs as you can that you previously hired out.

* Try camping for a change, rather than vacationing at hotels.

* Use up and wear out materials like clothing and shoes instead of going for latest fashions.

* If the children are gone from the home, downsize to a smaller house.

* Start a part-time home business, or take on an occasional extra job in the neighborhood.

When you start saving for retirement, you need to get your goals and objectives in order. Many people make the mistake of prioritizing their children's education before their retirement. While putting some money away for your children is wise, it shouldn't be number one on your list.

There are alternative ways your children can fund their education, such as through student loans. They have many years to pay these loans back whereas you will be left with fewer years to make up your retirement savings.

If you wait until your income goes up to start saving for retirement, you'll have to stretch to catch up and may still be short of cash. Much larger contributions will be necessary if you delay for long. And there's no way to truly regain what has been lost.

These figures tell the story. Contributing $7,000 annually from the age of 25 produces a retirement fund at age 65 of more than a million dollars, assuming six percent interest.

Contributing the same amount starting at age 45 yields just a quarter of that. Are you ready now for some serious retirement planning?

Warren Grandine writes for Retirement EZ, which offers  information resources and a free newsletter at http://www.retirementez.com