7 Tips for Feathering Your Retirement Nest

One third of Americans aren't saving for retirement, and roughly the same number have no savings at all. If you can relate, here's the good news: It's never too late to start saving and investing for retirement. Better yet, you don't have to be an expert to feather your nest. Here are seven smart, simple steps to get started:




1. Figure out your price tag
Estimate the dollar amount you'll need to be financially independent in retirement. Factor in how much of your current earnings you are willing to commit, what you've already accumulated (your savings, retirement plans, investments, etc.), and the number of years you intend to continue to work. Then calculate a monthly "payment" to your retirement fund.



2. Open a tax-deferred retirement plan

If your company offers a 401(k) and you're not participating, sign up immediately. If your company doesn't offer a 401(k), go to a bank, credit union, or other financial institution and open a tax-deferred individual retirement account, such as a Roth IRA.



3. Invest in a mutual fund

Find a mutual fund that fits your needs. There are four basic types of funds -- money market, bonds, growth and income, and growth -- and they range from "low" to "high" in terms of risk tolerance. (Hint: Look for editors' picks at magazines such as Money or Kiplinger's Personal Finance.)



4. Enroll in a mutual-fund debit program

Authorize your mutual-fund company to debit a pre-set amount from your bank account to buy shares on a weekly, monthly, or quarterly basis. Many companies have reduced their minimum investment to establish accounts to as little as $50 per month.



5. Sign up for a mutual-fund reinvestment program

Help your investments to grow automatically by opting to reinvest your dividends in more shares instead of receiving the dividends in cash. At the time you establish the account, simply check the related box on your application.



6. Save money -- without thinking

Set up an automatic savings plan with your bank. You can request a select amount to be automatically deducted from your checking account and deposited in your savings account or retirement fund. (To stay on track, the amount should be close to the number you came up with in Step 1.)



7. Pay yourself first

Every month, write yourself the first check -- before you pay your other bills. Deposit the check in your savings account or retirement fund. Do the same thing with "found" money -- gifts, tax refunds, work bonuses, healthcare reimbursements, and other types of cash outside of your regular paycheck.

Finally, commit to a long-term strategy -- one that keeps money invested for five years or more. You will increase your opportunities for gains and help create true financial security in your retirement.





Deborah Owens is a nationally recognized expert on investment literacy and creating and maintaining wealth. She is author of the critically acclaimed book "A Purse of Your Own: An Easy Guide to Financial Security" (Simon & Schuster, 2010, $15.00) and a radio and television host popular with audiences of NPR, PBS, and numerous other broadcast networks. Her current national campaign -- "A Purse of Your Own" -- is dedicated to recruiting one million women to participate in local "Purse Groups" to support their journeys to financial empowerment. Contact her on the Web at deborahowens.com.