Degree column: Top 10 savings tips

Top ten ways to prepare for retirement:

1. Start now, set goals, and stick to them. Start early. The sooner you start saving, the more time your money has to grow. Try to imagine what you'll want your retirement to be like, devise a plan for obtaining it, and stick to it. Invest for the long term, and remember, it's never too late to start.

2. Know your retirement needs. Retirement is expensive. A general rule of thumb is that you'll need about 70-80 percent of your pre-retirement income to maintain your standard of living when you stop working.

3. Set a realistic time horizon. These days, people are living longer and enjoying retirements of sometimes 20 years or more. This means planning is even more important than in the past, so make sure you take into account a longer time horizon as you set your retirement goals.

4. Find out about your Social Security benefits. Social Security is only one source of retirement income — the other two are normally employer retirement plans and personal savings. Call the Social Security Administration at 1-800-772-1213 or visit www.ssa.gov for a free Personal Earnings and Benefit Estimate Statement (PEBES).

5. Learn about your employer's pension or profit sharing plan. If your employer offers a plan, check to see what your benefit is worth. Before you change jobs, find out what will happen to your pension. Learn what benefits you may have from previous employment and if you can roll them over to an IRA.

6. Contribute to a tax-sheltered savings plan. If your employer offers a tax-sheltered savings plan, such as a 401(k), sign up and contribute as much as you can. Your current taxable income will be lower, your company may contribute a match, and automatic deductions make it easy. Over time, deferral of taxes and compounding of interest make a big difference in the amount of money you can accumulate.

7. Put money into an Individual Retirement Account. Personal savings will make up a large portion of your retirement income. A good way to build personal assets for retirement is to open an IRA. Currently, you can contribute up to $4,000 a year into an IRA, or $4,500 a year if you're over age 55. You can also contribute small amounts throughout the year to an IRA — it doesn't have to be all at once. And don't forget that you have until April 15 to make a contribution for the prior year.

8. Consider exposure to equities in your retirement portfolio.It's hard to build enough retirement assets if you're not investing in equities. Over the long-term, equities have historically performed better than other investments, so to get the most out of your savings you may have to invest at least some of your money in equities.

9. Monitor your plan. At least annually, review what you're doing for retirement planning. Examine your goals and significant life events that may have occurred and adjust your plan if necessary. Make sure that your investment plan is still on track to help you reach your financial objectives.

10. Ask questions. These tips should point you in the right direction, but you'll need more information regarding your personal retirement goals.

Here are some other sources of information to help you prepare for retirement:

- Employee Benefits Security Administration, U.S. Department of Labor, 202-219-8776; www.dol.gov/ebsa/consumer_info_pension.html

- Social Security Administration, 1-800-772-1213; www.ssa.gov

- American Association of Retired Persons, 1-888-OUR-AARP (1-888-687-2277), 601 E Street N.W., Washington, DC 20049; www.aarp.org.

- Employee Benefit Research Institute, 202-659-0670; www.ebri.org.

Toi N. Degree is a family and consumer education agent, Rowan County Cooperative Extension Service. Call 704-216-8970 or e-mail toi_degree@ncsu.edu.