Why participate in a retirement program? 
Most people know they need to save for retirement, but many just don't know where to start. Bills, taxes and debts can overshadow the need to save for the future. Worries about how difficult it may be to save or find the right investments can prevent many people from taking the first step. Don't let this happen to you. If you're looking for a starting point, take advantage of the retirement plan offered by your employer. Your company's retirement plan makes it convenient for you to set aside money, offers valuable tax benefits and gives you many investment opportunities for your savings. No matter how far away retirement seems, it's a fact that a financially secure retirement happens with good planning and perseverance. A retirement plan can make it easy to start saving for your future today.
Do you plan to retire early?
Many early retirees trade comfortable salaries for less stress and more leisure time. They need money for changing circumstances but have less time to accumulate it.
How long will you live?
Life expectancy has increased 30 years over the last century. Your retirement years might be as long as your working years. Are you financially prepared for 20 or 30 years of unemployment?
Do you ever procrastinate?
People are often too overwhelmed with day-to-day financial worries such as car repairs and mortgage payments to focus on saving for their future. They think they can catch up on retirement savings later in life. But time is money when saving for your retirement.
Social Security
Social Security benefits will replace only a portion of your income - it is up to you to make up the difference. If you take your benefits before your normal retirement age under Social Security, you'll have to accept a reduction in benefits. For average full-time workers who retire at age 65, Social Security replaces approximately 40% of earnings. A pension will help, if you have one. But you must supply the rest of your retirement income on your own - either by working then or by investing now in your retirement plan. Experts estimate you'll need at least 80% of your pre-retirement income in order to live comfortably in retirement. The actual number depends on your needs and desires.
Inflation
Due to inflation, your money buys less and less every year. As a result, you will need more money in the future to buy what one dollar buys today. The bottom line for your retirement - keep two factors in mind:
- You'll probably need a much larger nest egg than you think.
- Earnings on your money need to outpace inflation by a comfortable margin. That way, you are making real gains instead of just breaking even.
Consistent, long-term investing - not just saving - is the key to achieving the growth you'll need to reach your retirement goals.
Source: U.S. Bureau of Labor Statistics, www.bls.gov and National Association of Home Builders, www.nahb.org.
Social Security benefits will replace only a portion of your income - it is up to you to make up the difference. If you take your benefits before your normal retirement age under Social Security, you'll have to accept a reduction in benefits. For average full-time workers who retire at age 65, Social Security replaces approximately 40% of earnings. A pension will help, if you have one. But you must supply the rest of your retirement income on your own - either by working then or by investing now in your retirement plan. Experts estimate you'll need at least 80% of your pre-retirement income in order to live comfortably in retirement. The actual number depends on your needs and desires.