Are you saving enough for retirement? For most people, this is a troubling question with no easy answers. Financial planning experts estimate you need 70 to 80 percent of your current income to maintain your present standard of living when you retire. Many Americans are saving only a portion of what they’ll need.

The closer you are to retirement, the greater its urgency. Whether you are in your 50s or early 20s, it is critical to begin planning and saving for retirement. With proper planning, you can save enough to support your income needs throughout retirement. Your age, expectations for retirement, present assets and other variables figure into retirement planning. Because everyone’s circumstances vary, it is important to work with your financial advisor to review your current retirement savings and develop strategies to help you meet your retirement needs.

In developing a plan, you and an advisor need to determine:

One of the first rules of retirement planning is to save as much as you can in your company retirement plan, such as a 401(k) or 403(b) plan. The second rule is to try and save more than you think you can—stretch a little now to invest in your future.

Because the money you invest in a tax-deferred plan is contributed before you pay income taxes, you can afford to invest more. Contributing to retirement savings with pre-tax dollars makes a substantial difference—as much as $100,000 in the following example.

If you made a pre-tax contribution of $5,000 for 25 years, earning an eight percent return annually, you will amass $394,772. Assuming you’re in the 28 percent tax bracket, if you paid taxes before you made your $5,000 investment, you would have only $3,600 to invest. Assuming an annual return of eight percent over 25 years, you would have only $284,236, and that total could further be reduced by taxes on earnings during the accumulation process, depending on how you have invested your money.

Remember, your best chance of accumulating a comfortable retirement nest egg comes from developing an investment plan that starts at an early age and involves regular investments. The value of investing early—and benefiting from compounding earnings and stock appreciation—is illustrated in the following comparison.

Both investors earn an annual eight percent rate of return. Investor A begins saving $2,000 a year at age 20 and saves for nine years before ceasing annual contributions. By age 64, the total investment of $18,000 has grown to $398,807.

Investor B waits for nine years before he begins investing. Then he invests $2,000 a year for 34 years. His total investment is $68,000—nearly four times as much as Investor A—but because he started later, his investment totals only $343,633 at age 64. IBI