Procrastination is a word that most of us know all too well. While there are times when holding back can pay off, planning for your retirement is not one of them. You have to start now to plan and save for retirement. It’s never too early. But, while early is certainly preferable, it’s also never too late.

Experts estimate that you will need 2/3 to 3/4 of your current income to lock in financial stability for your post-retirement years. On average, Social Security will only supply 40 percent or less of the income you’ll need in retirement.

You are likely to live a minimum of 20 or more years after you retire. That’s good news — provided you have the money to afford this longevity. If you start saving in your 20s or 30s, you can possibly be a millionaire by the time you reach retirement age. Even a slight increase in contributions to your retirement savings plan — 1 percent or 2 percent — can reap huge benefits 15 or 20 years down the road.

If you stay the course, you are likely to maintain or improve your current standard of living in retirement. Use the following 3-step program for successful retirement planning and saving:

Pinpoint your major sources of retirement income

Consider all of your anticipated sources of retirement income. As you walk through each of them, consider which ones you have, which ones you don’t, and which ones you should consider adding.

Let’s start with the one most Americans depend on — Social Security. Each year, about two to three months before your birthday, you receive a statement from the Social Security Administration detailing the facts and figures surrounding your contributions and anticipated retirement benefits. Review and keep this document. It’s a vital piece of information for your retirement planning. Especially relevant is the comparison of what benefits you can expect at various retirement ages. The longer you work, up until age 70, the greater your benefits.

Another major source of retirement income is an Employer Pension Plan. If you have a pension plan, you need to look at its provisions carefully and make sure you understand them fully. The most important thing to keep in mind is that your pension may be significantly reduced, or completely eliminated, if you are not with the company long enough to be fully vested.

Employee Contribution Plans, with the most common being a 401(k) plan, are a highly-effective approach to putting money away for retirement. Far and away the best feature of employee contribution plans is that you build your retirement nest egg using pre-tax dollars that grow tax free until you withdraw them.

IRAs are also tax-advantaged retirement vehicles that you can easily establish with your broker or banker. There are two types of IRAs — traditional IRAs and Roth IRAs. Consulting a CPA or other financial adviser to learn more about which IRA is best for you could be a critical step in your retirement planning.

More and more experts agree that, in order to afford retirement, you will also need to have private investments to supplement other sources of income.

Here again, advice from an objective party who does not have an interest in promoting a particular investment can be invaluable.

STEP 2: Take A Realistic Look At Retirement Costs And Goals.

The operative word here is REALISTIC. You need to be honest with

yourself NOW so you are protected from unpleasant surprises when

entering retirement.

Questions to consider that will help you get a good picture of your retirement expenses and financial responsibilities range from will you keep or sell your present home; do you plan to make gifts to family members; or what will your hobbies cost. While you don’t need to, and at this point can’t, calculate expenses to the last penny, you should sit down with a calculator and come as close as you can to listing all major anticipated expenses.

There is another factor you need to take into account as you project your retirement expenses…and that is inflation. Based on the past ten years, experts say you should figure on an inflation rate of 3 to 4% a year. Presuming the relatively low inflation rate of 3% per year, you would need about $90,000 annually in 20 years to maintain the same lifestyle that $50,000 in income gave you when you retired.

STEP 3: Close the Gap between Your Projected Income and Your

Retirement Goals

If you are like the majority of Americans, you will discover that there is a gap between your retirement goals and the money you’ll need to support them. Now is the time to do something about it. There is amazing power in putting away $100 a month towards your retirement, doing it without fail, and doing it whether you’re 30 or 60.

That $100 a month invested for 5 years earning 6% will equal $6,977. After 20 years, $46,204. After 30 years, $100,452. If you can find a mix of investments that earn you 8%, you’ll have $7,348 after 5 years; $34,604 after 15 and $149,036 after 30. Now, if you can set aside more than $100 a month, the savings will be even greater.

Individual investments are often pivotal in closing the retirement income gap. Whether you make your retirement investment decisions on your own or get professional assistance, considerations you should keep in mind include your current age; your desired retirement age; your tolerance for risk; your liquidity requirements; and tax implications now and at retirement.

Once you’ve analyzed those criteria, you can map out a retirement

investment strategy that will work for you both now and in the future. A qualified investment professional can help you select the investments that are right for you.