Gen X and Y: 4 tips to get your retirement on track

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Have you put off thinking about retirement because it seems so far away? Well, maybe it's time to start thinking about it. When I give retirement planning workshops to boomers, audience members often express one of these two thoughts:

-- I wish I'd heard you 20 years ago.

-- My kids need to hear your messages.

So if you're a member of Gen X or Gen Y, why not get 2012 started on the right track by taking steps to improve the odds that you'll be able to enjoy your retirement years? It's never too early to start planning for a long and prosperous life. But don't try to do everything at once -- you're more likely to succeed by taking one step at a time.

Step No. 1: Find ways to spend less money. The primary excuse most people give to explain why they can't save any money is that they spend their whole paycheck -- and then some -- in order to afford all the things they want now. Why not think of it this way, though: You can buy yourself freedom from work in your later years if you're careful about how you spend your money today. If you spend all your wages now, you'll become a slave to work for the rest of your life.

Over the years, I've found many ways to save significant sums of money, including driving my cars into the ground instead of buying new ones; not buying the latest electronic gizmo and making do with older versions; and not taking expensive vacations. In spite of these actions, I've had a great life.

You can also be careful about how much money you spend on your children's college education. Will it really ruin their lives if they go to a good public school instead of an expensive private one? Keep in mind that if you sacrifice your retirement savings to pay for your kids' colleges, the "gift" you might end up giving them is a need to move in with them in your later years.

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Step No. 2: Make changes to improve your health. There are simple things you can do to significantly reduce the odds of expensive and debilitating illnesses at any age. And the sooner you get started, the better. Improving your health doesn't need to cost you anything -- all it takes is determination.

Think about reducing the amount of fatty foods you eat -- including most meats -- and increasing the amount of fruits, vegetables and grains you consume. The added bonus? Cutting out meat and consuming more fresh fruits, vegetables and grains should save you money at the grocery store, since these foods usually cost less than meat. This will allow you to save more for retirement, so you'll be achieving two goals for the price of one.

Most people would also benefit by increasing the amount of exercise they get every day. If you're a couch potato but want to be more active, try starting with a brisk 30- to 45-minute walk around your neighborhood, either first thing in the morning or right after dinner. Take your spouse or partner, too, if you have one. Or call up a friend who's interested in exercising. And if you're already exercising, good for you! But I bet you can find ways to improve your workouts by making sure you get all the kinds of exercises (stretching, cardio, strength training and balance) that are necessary to keep you fit in your later years.

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Step No. 3: Invest in your career. You won't be able to invest much for retirement if you don't have a job that pays well. If you're in a dead-end job, maybe it's time to investigate what type of training or education you need to start a career with more of a future. Or if you're in a good career already, think about the steps you can take that will make you more valuable. It might not even cost you anything, since it may just involve taking more training offered by your employer or taking on new responsibilities.

Think you've been doing well at work but haven't received a raise lately? Consider asking for a raise, but do your homework first, as suggested in the links below. If you're successful, invest the amount of your raise in your 401(k).

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Is it time to ask for a raise?

Step No. 4: Increase your retirement savings. Yeah, yeah, I know you've heard it again and again that you should start saving for retirement when you're young. Well, you're hearing it again!

If you participate in a 401(k) plan at work, bump up your savings by 1 or 2 percent of your pay. Or if your plan has an auto-escalation feature that periodically increases your contribution, sign up for it. Saving a little more now won't ruin your life -- most likely, you won't even miss the money. And you'll learn how to get by while spending less (see Step No. 1 above). Better yet, make sure you're saving enough money to fund a comfortable retirement. The link below offers some guidelines.

How much should Gen X and Y save for retirement?

You'll feel much better about your future if you take charge now. And there's no better way to get started than by taking one of these steps during the first few weeks of 2012.

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    Steve Vernon helped large employers design and manage their retirement programs for more than 35 years as a consulting actuary. Now he's a research scholar for the Stanford Center on Longevity, where he helps collect, direct and disseminate research that will improve the financial security of seniors. He's also president of Rest-of-Life Communications, delivers retirement planning workshops and authored Money for Life: Turn Your IRA and 401(k) Into a Lifetime Retirement Paycheck and Recession-Proof Your Retirement Years.

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