Retirement planning for people in their 30s
By Leslie Haggin Geary • Bankrate.com

You work hard and your paycheck reflects your achievements. But, at the same time, there is a dizzying array of new ways to spend. Maybe it's saving for your first home or you just signed on the dotted line for a hefty mortgage. There may be one baby, or more, to provide for. Even the dog is begging for more food.

Kick off retirement savings 1. Ramp up 401(k) savings 2. Save outside of work, too 3. Maintain an aggressive asset allocation 4. Keep company stock in check 5. Don't let a better job derail your retirement plan 6. Start preparing for college 7. Protect your earnings with disability insurance

To be sure, establishing a home and family is expensive, and it's easy for retirement to seem like an impossible goal for individuals in their 30s.

"You can't always do it all," says Dick Bellmer, chairman of the National Association of Personal Financial Advisors.

So breathe easy. You won't have to reach all of your goals at once. But, retirement should remain your top priority. That means you'll need to work hard to balance spending with saving. Here's how:

1. Ramp up 401(k) savings
Ideally, you'll want to make the maximum annual contribution limits into an employer-sponsored fund, such as a 401(k). For 2007, that's $15,500. As you move up the career ladder, put raises into your retirement savings, don't spend them. If you can't afford to stash all of your pay increases into retirement funds, gradually increase contributions over time, says Dee Lee, a Certified Financial Planner and author of "Women & Money."

"Let's say you've got 3 percent in your 401(k) to qualify for the company match. Add a bit more. Then maybe add another percent of your salary a few months later, so eventually you're saving 10 to 15 percent of your income," says Lee. "You won't miss the money if you increase saving slowly."

You'd be surprised the difference that even an incremental, 1-percent increase can make in the long run. For example, a 30-year-old who saves 6 percent of a $50,000 salary, or $3,000 a year, will have nearly $840,000 banked by the time she has to start taking funds from her 401(k) at age 70½. (This assumes an 8 percent annual growth rate.) If she boosted her yearly contribution by just $500 she'd have nearly $980,000. That's a difference of nearly $140,000.