Your 5-minute guide to saving your retirement

• Facing a choice between funding your children's college education and saving for retirement, pick retirement. Your contributions to a tax-deferred savings plan won't be counted as income, and your 401k assets are excluded when a college reviews your ability to pay. (See "Balancing kids' college and retirement savings.")

• Be careful adding risk to your investments to make up for lost time financing your retirement, but do talk with your financial adviser about appropriate and possibly aggressive investing. You will invest differently if your retirement date is three years away than if it is 10 years away.

• Don't forget that you're not investing only from now until your retirement date but from now until the end of your life.

Look to your home

There's no place like home to find some financial aid. You have several options:

• Pay off your mortgage as soon as possible to cut down on bills you'll need to pay in retirement.

• Sell your house and purchase a smaller one, possibly in a less-expensive location.

• Tap the equity with a reverse mortgage. The loan isn't repaid until the house is sold. Seek advice from an expert. Reverse mortgages have higher closing costs than regular mortgages, and terms of the loan could force you to give up your home if you leave it for an extended nursing-home visit. (See "Lenders cut off the home equity tap.")

• Consider getting a roommate, and make sure you formalize the agreement. (See "Let someone else pay half your bills.")

Delay, delay, delay

If you're doing everything you can to save and you still won't have sufficient savings, delay retirement by working full time or part time at your current job, finding a new one or starting your own business. (See "The new retirement: Scale back, work on.") Continuing to work has several benefits:

• You can continue to fund your retirement nest egg and give it more time to grow. Even a few additional years of saving can make a substantial difference if you keep a healthy chunk of your portfolio in stocks. You don't have to start withdrawing from your 401k and IRA until you reach 70-1/2. That requirement does not apply to a Roth IRA.

• You'll have fewer years of retirement to fund. Check out MSN Money's Life Expectancy Calculator for an estimate of how long you could live.

• You'll give yourself time to get used to the retirement lifestyle if you work part time for a while. The sudden switch from full-time work to full-time leisure can be devastating for many retirees. (See "What really matters in retirement.")

Finally, don't be tempted to put your retirement plan into action and then sit back and wait. Periodically review asset allocation, balances, goals and so on to ensure you're staying on track.

Updated June 4, 2009

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