We have all heard the warnings: There is a good chance that Social Security will not be available by the time members of Generation X are ready for retirement. I know I’m not counting on it! And if you are even younger?

Forget about it.

So what are younger workers supposed to live on after they retire? Will we all be expected to work until we die?

Optimistically, the federal government will figure out something to save Social Security before we reach such dire circumstances. But, as there are no guarantees, anyone who is more than five to ten years from retirement age should start thinking about how he or she is going to fund that retirement, whenever it comes.

Whether you hope to retire in style, traveling around the world and taking up new hobbies, or you merely want to have a roof over your head and food on the table every day, there are a number of steps you can take now to ensure the money is there, even if Social Security is not.

Save, save, and then save some more

This one should be a no-brainer. Whether or not you expect to get Social Security, inherit some money, or even win the lottery, you need to know how to save. Ideally, you should put something away every month. Even if money is tight right now, get in the habit of saving at least a little bit. When times get better, save some more. Rinse, repeat, and do it again.

Get into the habit now of spending less money than you earn so that saving becomes a way of life. The earlier you start saving, the faster your money will grow, and the more you are going to have when it is time to retire.

Max out your 401(k)

If you have a hard time finding the money to save each month, have your employer do it for you. If you have a 401(k) plan through your work, sign up for it and then max out your contribution every month. In some instances, your employer may even match some of your contributions. If you do not have a 401(k) (or even if you do), open up an IRA or Roth IRA as well, and fund it every year. The earlier you begin putting money into a 401(k) or IRA, the more it is going to grow. If you begin saving during your first job, you will likely have a nice-sized nest egg saved up by the time you are ready to retire.

Invest with care

To have enough money to retire without Social Security requires you to invest it. Putting the money you save under a mattress or in a low-yield savings account is not going to leave you with much more than you started with, and that will likely not be enough. Talk to a trusted financial advisor about the best way to create a solid investment strategy, based on your income, age, and goals. Research the options for your 401(k) and IRA before choosing the plan that is best for you.

The best investment strategy focuses on diversity of products and risk. Higher risk investments can earn you more money, but there is also the chance that you could lose a lot. Some investments that are targeted toward retirees—such as annuities—have higher fees but also have guarantees that other investments don’t offer, so you will want to do your research before you make any decisions.


Jeff Rose is a certified financial planner and author of the blogs Good Financial Cents and Soldier of Finance.  Learn more about his Roth IRA Movement that has inspired over 140 personal finance advisors to educate young adults on the importance of saving.