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Retirement Planning: Never A Wrong Time

It doesn't matter if you're in your early 20s or your early 60s: You're never too young to plan for retirement, and never too old, either.

That's the word from Kiplinger's Personal Finance magazine, whose current issue has a retirement timeline anyone can follow.

To see the article and more, click here.

Kiplinger's and the National Association of Personal Financial Advisors (NAPFA) are partnering to sponsor their annual "Jump-Start Your Retirement Plan Days." The Early Show viewers can call a toll-free number or e-mail Kiplinger's, and get retirement questions answered by professional financial advisers for free. The next opportunity is on Aug. 30 from 9 a.m. to 6 p.m. eastern time. They can dial, toll-free, (888) 919-2345. Or, consumers can e-mail their questions to

Kiplinger's Deputy Editor Janet Bodnar discussed it all on The Early Show Monday.

The plan outlined by Kiplinger's is, in essence, a simple year-by-year guide.

Bottom line: The earlier the better, but better late than never.

Why is it so difficult for us to put money away for retirement?

Bodnar told CBS News, "Young people don't believe they are going to retire. For them, it's too far in the future. But it isn't hard for just young people. It's difficult for people of all ages. People in their 40s don't want to face it. They have other obligations: They just bought a house, and they'd rather not think about it. For everyone, it's a matter of, 'Where am I going to get the money to do this?' And no one thinks they can do it, saying to themselves, 'I need all my money for my expenses now.'"

She added: "And then there's the fear that prevents us from taking stock and seeing how we're doing: We're afraid we're going to be told we're not on track. But the good news is that some people may find that they are in better shape than they think they are. If you have been saving some all along, you might be surprised."

Bodnar continued, "Another advantage of taking stock of where you are in your retirement planning is that you may find that you have enough to enjoy some of your money before you actually retire."

The basics, from Kiplinger's:

Retirement Timeline: What you need to do, and when you need to do it, to make the most of your savings:

  • First Day on the Job
    Sign up for your employer's retirement plan. If you're lucky, you will be automatically enrolled in your company's 401(k) plan. Be sure to contribute at least enough to capture your employer's match.
  • Age 35
    Earmark a portion of each raise to your retirement savings. Your ultimate goal: to sock away 15 percent of your gross income, including your employer's matching contribution.
  • Age 45
    Take advantage of your employer's investment-advice program to see whether your retirement savings are on track. Or go to, click on "Retirement Savings," and select "Am I saving enough for retirement?"
  • Age 50
    Start to make "catch-up" contributions to your 401(k) account and your IRA.
  • Age 55
    Take penalty-free distributions from your 401(k) if you leave work and need the money. You'll still owe taxes. The early-out clause does not apply to IRAs.
  • Age 59-1⁄2
    Access IRAs and other retirement accounts. Early-withdrawal penalties disappear.
  • Age 62
    Consider taking early Social Security benefits, but know that your checks will be reduced by 25 percent or more for life.
  • Age 65-67
    Start collecting full Social Security retirement benefits, depending on your birth year. Earnings-cap limits disappear.
  • Age 70
    Sign up for Social Security benefits even if you keep working. Extra retirement credits end for those who have delayed collecting benefits.
  • Age 70-1/2
    It's time to take minimum distributions from your retirement accounts each year.

    50 is the Magic Number
    Turning 50 is a logical milestone at which to take stock of your retirement situation, whether your target is five or 15 years away. That's when you can start making "catch-up" contributions to your 401(k) or other work- place-based retirement plan. This year, workers can contribute up to $15,500 to an employer-provided retirement plan. If you are 50 or older by the end of the year, you can kick in an extra $5,000, for a total of $20,500 in 2007.

    And you don't have to stop there. You can also contribute up to $4,000 to an IRA (or $5,000 if you are 50 or older), even if you contribute to your employer s plan. Depending on your income, you might even be able to deduct your contribution to a traditional IRA or fund a Roth IRA, which offers no up-front tax deduction but provides tax-free income in retirement. Stay at-home spouses can also contribute to an IRA.

    To watch the Early Show segment,