It's Never Too Early to Start Planning for Your Retirement
By Ginita Wall, CPA, CFP

Trouble is, there's always so much more in your life that requires time and money that it's not always easy to devote those precious resources to a retirement that is years away.

Here are five painless ways you can begin saving for your retirement without unduly busting your budget.

1. Let your employer do it. If you never see the money, it's not so hard to sock it away in retirement accounts. So let your employer put it away, into your 401(k) or TSA plan, directly from your paycheck. If you are self-employed, don't wait until the last minute to stash money away. Set up an IRA with a mutual fund company, figure out how much you want to save, and have the mutual fund draft money from your checking account automatically each month.

2. Get aggressive. If you have years to go before retirement, invest as aggressively as you can. Taking risks by investing in growth stocks will pay off in greater rewards over time, and you'll be miles ahead. For example, investing $200 a month for 30 years in stocks that earn an average of 10 percent will garner $450,000 at retirement. But if you invest in certificates of deposit and earn only 5 percent, you'll end up with only $166,000.

3. Make retirement a priority when job-hunting. When you are looking for a great job, seek out employers with terrific retirement plans. Those plans may be the traditional type in which the employer pays monthly retirement benefits, or a 401(k) salary reduction plan that has employer matching. If your employer is in a dynamic field, such as high-tech or health care, employee stock option plans may provide a great boost to your retirement stash. Those plans let you buy stock at a bargain price, producing instant gains as well as potential future profit if the stock continues to flourish.

4. Get smart about your finances. Making savvy financial decisions in all areas of your life will mean you'll get to where you're going easier and faster. If you have high-interest credit cards, cut expenses until you get them paid off. When you buy a home, don't fall in love; think about the resale value and get the best house you can for the money. Shop smart for groceries, clothes and entertainment, and your money will grow and grow.

5. Test-drive early retirement to see if it fits. If you are 30-something and want to retire at 40-something, plan very carefully. If you plan to retire early by scaling down your lifestyle, try it now to make sure it's do-able. The benefits of cutting back now are twofold: First, you'll know whether tightening your belt is possible for your family, and secondly, a slimmer budget will help you save faster for that dreamed-of retirement.

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