Your 5-minute guide to saving your retirement

By MSN Money staff

Spend less and save more. That's what the experts advise if you're getting a late start on retirement savings. Chances are you'll also have to work longer than you expected.

Don't despair and don't panic. Many Americans are in the same boat, and there are still ways to catch up.

First, get an idea of your expected post-retirement expenses. Start with MSN Money's Retirement Expense Calculator. If you are new to investing or want to brush up on what you already know, there are short online courses in MSN Money's New Investor Center.

The basics: Social Security

The next step is to look into Social Security. You'll probably get benefits, but they likely won't fund a comfortable lifestyle. A third of current retirees rely on Social Security for at least 90% of their income, and the average monthly check is $1,007. (See "Could you survive on Social Security?")

• Figure out what your future benefit will be by checking your annual Social Security statement. If you're in your 50s or younger, anticipate that the amount will be smaller than the estimate. A reduction in future benefits may be one way Congress tries to keep Social Security solvent beyond 2041. (See "Your free financial report card.")

• Don't be tempted to start collecting at age 62. You'll get a smaller monthly check for life -- 20% to 30% less -- than if you wait until you're fully eligible. For most folks, that's not 65. For anyone born after 1937, retirement age increases by two months per year until it stabilizes at age 66 for people born between 1943 and 1954. After another gradual increase, it's 67 (at least for now) for folks born in 1960 or later. See the Social Security Administration's Retirement Planner.

• You'll get a larger Social Security check if you don't start collecting as soon you're eligible. Benefits increase 6% to 8% each year you delay until age 70.
• The Center for Retirement Research at Boston College offers a wealth of information, including three unusual strategies for claiming Social Security benefits.

Just do it -- now

Now that you know what the government will likely kick in, turn your attention to trimming expenses and boosting your savings. Start with MSN Money's Retirement Income Calculator and see "8 money moves you must make at 50."

• Make a list of essential expenses and put retirement savings in the No. 1 spot. (See "55 and haven't saved a dime? Yikes.")

• Reduce spending wherever you can and, most importantly, pay off credit card debt. (See "Living 'poor' and loving it" and "Your 5-minute guide to budgeting.")

• Take advantage of benefits available to retirees by exploring senior discounts at aarp.org and other Web sites. In addition, seniors can get help paying for food, utilities and other essentials. Use the Eldercare Locator.

• Maximize your contribution to your employer's tax-deferred retirement plan. Then make the maximum contribution to an IRA. If you're self-employed, consider a Keogh plan in addition to an IRA. (See "The vanishing safety net.")

• Federal law allows older workers to play catch-up. Those 50 and older can put an extra $1,000 into an IRA (for a total of $6,000 in 2009) and an extra $5,500 into a 401k or similar tax-deferred employer plan (for a total of $22,000 in 2008). (See "Saving strategies for the over-50 crowd.")

Continued: Saving for retirement and college

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