fairwinds.org | wherever you are

It is a shocking statistic: A March 2014 survey by the Employee Benefit Research Institute found that nearly 38 percent of workers had total savings and investments of more than $25,000. A total of 36 percent said that they had less than $1,000 in savings.

These people will face a difficult reality when they reach retirement age: Social Security provides far from enough income for people in their retirement years. Those who do not save enough will spend these years worrying about paying their bills.

The truth is, retirement is not inexpensive, even if you do not have a mortgage to pay or significant credit card debt. Consider medical costs. Fidelity Investments found that a couple retiring in 2014 at age 65 with no employer-provided health care coverage will need $220,000 in savings to fund out-of-pocket medical expenses during their retirement years.

The good news? Even if you've been lax in saving for retirement, you can still take steps to increase the amount of money available to you after you quit working. Here is what you should be doing at every stage of your working life to save for retirement.

Just getting started

Admittedly, it is not easy to think about saving for retirement when you are just getting started on your job. However, there are certain steps you can take today to boost the odds that you'll have enough money to enjoy your retirement years.

Step one? Participate in your company's 401(k) plan if it offers one. Moreover, participate completely; max out your regular contributions. Money that is automatically deducted from your paycheck will not be missed. However, you'll certainly appreciate it once you retire.

Next, invest in a traditional or Roth IRA or a combination of the two. This allows you to save money for your retirement years on a tax-deferred basis.

The other important step to take at this stage? Practice sound financial habits. You do not want to enter your retirement years burdened by credit card debt. The less consumer debt you generate during your 20s, the better off you'll be as retirement nears.

Mid-career

Again, debt remains a big factor in how enjoyable your retirement years will be. So do everything you can to pay off your debts as you move closer to retirement. Paying off your credit card debt is a must. If you can afford it, you should pay off your mortgage, too. Not having to make monthly payments in your retirement years will prove a big financial relief.

The mid-point of your career is also the time to start drafting a financial plan for your retirement years. Discuss your goals for your post-work life with your spouse. Do you want to spend most of your time with your grandchildren? Do you want to travel the globe or take regular cruises? Maybe you want to take up golf. Your goals for your retirement years will impact how much money you'll need for this time of your life.

Armed with this information, you can sketch out a rough figure of how much you'll need to save to reach your retirement goals.

If you have not yet opened IRAs for you and your spouse, do so now. Be sure to contribute regularly to these accounts. Every bit of money you save now becomes critical as retirement nears.

Five to 10 years before retirement

The Internet can help you determine if you are on track to have enough savings to support the lifestyle you desire during retirement. Use an online retirement calculator to determine how prepared you are for your retirement.

This is also a good time to evaluate your savings vehicles. You should maintain a diverse portfolio, investing in bonds, stocks, and other savings vehicles. However, this is a good time to move more of your savings to lower-risk investments. This will protect these dollars as your retirement years draw near.

During this time, it is important to learn about Social Security, too. You do not want to retire too early; this will diminish the amount of Social Security income you receive each year. In fact, the longer you can put off retiring -- if you are healthy enough to work -- the better off you'll be financially. Not only will you draw more income to support your retirement years, you'll also boost the amount of Social Security benefits you receive each year.

Finally, practice living on your post-retirement income before you leave the work world. You might find that you've underestimated how much money you'll need during your retirement years.

After retiring

Once you've retired, you need to be cautious about how much money you withdraw from your retirement savings each year. Many retirees follow the 4 percent rule, meaning that they only withdraw 4 percent of their savings each year of retirement. This is a sound financial plan to take.

© Fintactix, LLC 2015