You have barely started working, so why would you start worrying about retirement? The expected retirement age for Millennials is 73 years old. You have lots of time or do you?

A recent Fidelity study stated that if a 25 year old begins saving $160 per month for retirement it would generate $1,000 in monthly retirement income.

If you wait until you are 35 years old, you will need to save $270 per month to generate the same income. And if you wait until you are 45, you will have to save $500 per month. It pays to start early in retirement savings.

You pay FICA taxes to fund Social Security every paycheck, so that will be your retirement income. Today, Social Security does provide the bulk of retirement income for retirees and the average benefit is around $15,000 a year. Is that enough income for your retirement? What will Social Security look like when you turn 73? Who knows at this point?

Today 73% of baby boomers expect to work beyond retirement according to a 2013 Gallup Poll. 41% want to take on a second career or prefer to work. The other 32% are working beyond retirement by necessity. They did not save enough money.

A Rule of Thumb is that you should save 10 to 15% of your income for savings each year.

How much are you contributing to your Employer Sponsored Savings Plan? Does your employer match some percentage of your contributions? Do you contribute enough to capture the entire employee match? This is free money, so take it.

Does your employer have a defined benefit retirement plan? This is an old style pension plan where your employer makes the contributions.

If your employer does not have a retirement plan or if you are self-employed, are you making retirement contributions to a traditional IRA or a Roth IRA?

So, how are you doing on retirement savings? My next few postings will get into more detail on retirement savings plans.

Kowalczyk recommendation: Download “If You Can: How Millennials Can get Rich Slowly” by William J Bernstein on Amazon for 99 cents.

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