With Americans living longer, and people having healthy, active, post-retirement lives, saving early for retirement has become an integral part of living the full 'American Dream'.
With the doubt regarding the actual security of our Social Security system, saving early needs to start earlier every day.
Even if you have previously filed bankruptcy, it is possible to save for retirement (and if you've filed bankruptcy your retirement accounts were probably exempt, or safe from creditors).
When you're saving for retirement, the first thing you should consider is how much money you'll need, annually, once you retire.
Experts suggest that you'll need at least 70 percent of your pre-retirement income to live comfortably once you retire. That figure can vary, though, based on what your health care costs are and what type of expenses you think you'll have.
If saving enough money to give yourself 70 percent of your annual salary seems like a daunting prospect, consider this: your expenses will be down from your pre-retirement lifestyle, and you should have sources of income other than savings to help compensate you.
For example, once you stop working, you won't have to worry about things like commuter expenses, business attire, paying into social security or other retirement savings plans. If you own a home, your mortgage could be paid off by then.
Additional sources of income you may have include Social Security benefits, any pensions or 401 (k), or 457 accounts, inheritance, or part-time employment.
Imagine what type of lifestyle you will want.
If you plan on traveling a lot, expect to have higher travel expenses than you currently have. Or, if you can't imagine not working at all, figure on having a part-time job to supplement your lifestyle.
When you decide to start saving for retirement, make your savings a top priority. Budget a certain amount for savings each month, and try to increase that amount on a regular basis. Have that amount automatically deducted from your paycheck, if possible, so you're less tempted to spend it.
If your employer offers a 401 (k), 403 (b), or 457 plan, put as much money into the plan as possible, especially if your employer is willing to make matching contributions.
Also, research Traditional IRAs and Roth IRAs to see which type of savings plan may meet your needs. Traditional IRAs allow you to put off paying taxes on that money until you decide to withdraw it, while Roth IRAs tax the money now, but don't tax the money when you're ready to spend it.
Consider investing in the stock market, at least until you are ready for retirement. Stock investments can build up quickly, but since the stock market can be unpredictable, it's also possible to lose money quickly, too.
Look for accounts that offer compound interest. That means, for every dollar you invest, the interest is paid on the amount you invest as well as the interest that's already accumulated in the account. Some accounts pay interest only on the principal amount, which causes the account to build up more slowly.
Once you've started saving for retirement, you may see the dollars add up quickly.
Research your savings options, and select the ones that you feel are the most appropriate for you. And, remember to always consult with a tax or legal professional to review investment decisions before proceeding.