One day a friend of mine told me that she had some extra cash and was wondering what she should do with it.  I asked her if she had a retirement account.  She was a successful, educated woman so I naturally assumed that she knew about retirement accounts.  Her next response shocked me.  She said she didn’t believe in saving for retirement because she didn’t know if she would live long enough to use the money.  Therefore, she would rather spend the money now.  I asked her what she would do if she did live long enough to spend the money, and she replied that she would figure it out then. 

As a financial coach, that response disturbed me because the life expectancy in America is 78.7 years according to a 2011 Organization for Economic Cooperation and Development (OECD) report.  The national retirement age, the age where you can begin collecting Social Security, is 67 for people born in 1960 or later.  Therefore, it is very likely that she will live to be old enough to enjoy her retirement savings.  On April 1, 2014 there was an article in USA Today named Retirement: A Third Have Less Than $1,000 Put Away that said about 36% of workers have less than $1,000 saved, and about 66% of workers have less than $25,000 saved!  If you look at your current income now, how long can you realistically last in retirement on $25,000 or $1,000? 

Also ask yourself, do you want to just survive or do you want to enjoy your retirement years?  According to a CNN Money article on October 23, 2013, 34% of workers surveyed plan to work until they are 80 years old, and 37% don’t believe that they will ever retire!  71% of workers surveyed will end up having to work until they die (remember the life expectancy is 78.7) just to pay the bills when they're supposed to be relaxing, enjoying leisure activities or working by choice.  

This is why it's so important to start saving while you're young.  If you start early you can save less per pay period than you would need to if you started later due to compuonding.  Even if you have to start small with saving for retirement it’s better than nothing.  Whatever path you choose, please take the time to position yourself phenomenally in retirement.

Wondering how you can get started saving for retirement?  Check out these 5 tips!

1) Contact your Human Resources department to inquire about setting up a 401(k) or 403(b) pre-tax savings plan through your job.

*If your job doesn’t offer a retirement plan, then set up a Roth IRA or Traditional IRA through a brokerage account.  Talk to a tax professional or financial advisor to determine the right one for your needs.

2) Contribute at least enough money to receive the company match if offered at your job.  The company match is a part of your total compensation.  If you're not receiving the 401(k) match then you're leaving money on the table.

3) If you can, contribute the maximum amount for your retirement plan.  For the 401(k) and 403(b) plans the contribution limit is $17,500, and the Roth IRA’s contribution limit is $5,500.

4) Make the monthly deposit automatic, because you won’t miss what you don’t see.

5) Leave the money alone.  There are large penalities for withdrawing money before retirement age.  Rmember, this money for retirement not for fun!

Aisha Taylor is a #1 Amazon Best Selling Author of the book '5+5 FNPhenomenal Ways to Save $100 This Week Without Killing Your Lifestyle,' and the Founder of FNPhenomenal (Frugal –n- Phenomenal). FNPhenomenal helps women break the vicious cycle of making money, but not keeping it. FNPhenomenal provides education about money management, empowers women to take control of their lives, develop a healthier relationship with money, and pursue being phenomenal.

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