Retirement: Why Quit For Good, When You Can Quit For The Better?

Talking About Money With Jim Larranaga (ARA) - Only one quarter of Americans age and older have amassed $, or more for retirement, according to the Employee Benefit Research Institute's Retirement Confidence Survey. What's more, the previous year's survey found that percent of "forty-something" workers haven't even begun saving for retirement. If you're among them, you might be in for an unpleasant surprise when you leave your job. Calculate What You'll Need Most experts say you'll need percent to percent of your pre-retirement income after you stop working. Given today's life expectancies, you could easily live years beyond retirement. Seeing just how much money you'll need in retirement may give you a few gray hairs, but it can also motivate you to start saving - and fast. When it comes to saving for retirement, the sooner the richer. The table below shows that for every $, in your retirement nest egg, you'd have to save $, a year for years. Wait just five years to start saving and your annual contribution jumps to $,. (That's percent more.) Savings Goal How Much to Save Each Year (in a tax-deferred investment with an percent rate of return)

_________________ yrs______ yrs_______ yrs________ yrs

$,________$,_____$,_______$,________$,

$,_________,______,_______,_________,

$,_________,______,_______,________,

$,_________,_____,_______,________,

The American Savings Education Council reports that those who have calculated how much they'll need in retirement are more likely to save for their goal. And, they tend to save larger amounts. Fortunately, there are a number of tax-favored ways to set aside retirement funds. Invest Wisely Employer-sponsored retirement plans, such as (k)s, provide one of the best places to squirrel away your savings. You won't have to pay taxes on the money you contribute until withdrawal during retirement. Plus, the contributions don't count toward your current taxable income. Try to chip in the maximum amount allowed, particularly if your employer matches all or part of your contribution, which helps your money grow even faster. Traditional and Roth IRAs can also offer tax advantages. With a traditional IRA, you may be eligible to deduct contributions, depending on whether you participate in an employer-sponsored plan and your income. Whether you can deduct contributions or not, your money grows tax-deferred until withdrawal at retirement. Contributions to a Roth IRA are never deductible. But they offer a real plus - tax-free (yes, you read that right) withdrawals at retirement as long as you meet all the requirements. Tighten Your Money Belt Cutting unnecessary expenses can help you pare down your debt and boost your savings. Creating a budget may help. List your expenses, starting with the most essential. Make retirement saving a priority. Finally, consider paring the expenses over which you have some control, such as entertainment. You don't have to live like a monk, but I'm sure you can find ways to cut down discretionary spending. Lengthen Your Timeline Time equals money when it comes to saving for retirement, so staying in the game for a few extra years can help you stay ahead. Remaining on the job allows your investments more time to grow and may boost your Social Security benefits. Remember - it's never too late to start building that nest egg. Withdrawals prior to age / may be subject to a percent penalty. Jim Larranaga is Executive Vice President of Priority Publications, a Minneapolis-based publisher of financial newsletters.