BOSTON (CBS) – Forty-Somethings are at the tail end of the Boomer generation. They have been hearing about retirement and they do know it is approaching like a speeding train but some have been too busy to plan and many thought they still had lots of time.

They reached their 40th birthday and wondered how it happened so fast. They woke up one Saturday morning and realized that they had the American dream, the house with the two-car garage and picket fence. But the house needs painting, the fence got hit by the snow plow, the kids want to go to the mall, the dog needs walking and their spouse is worried about losing their job.

If you are a forty-something there is still time to save for retirement. Lots of time really. So what should you do? If you are already in a retirement plan at work be sure you are contributing as much as you can to the plan. Saving for your retirement will need to become a priority.

If you want to have a nest egg of $1 million and you have not started you will need to be aggressive. Assuming you are 40 years old and want to retire at 67 and we assume an 8% average return over those years you will need to save $11,000 a year to reach this goal. That’s $297,000 over your working career.

Most people don’t have an extra $11,000 a year in their budget they can earmark for retirement savings, but at 40 you do need to do some serious planning if you want a comfortable retirement.

Increase your retirement plan contributions every six months by one or two percent. You won’t miss the money if you do it gradually. And everyone in the family may have to give up those Saturday afternoons at the mall.

Most 40-year-olds are in the prime of their careers and at peak earning capacity. Bite the bullet and figure out a way to be putting away more. Look at your cash flow, your budget, where can you begin to cut corners; all of the corners count here. You may be caught between saving for college for the kids and saving for retirement for yourself.

You could consider modifying the dream of having $1 million by the time you retire. Would you settle for a half of million? Or you might consider working longer, past age 67.

Just a word of advice here, the last time I checked there were no scholarships out there for retirement.


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