Retirement is supposed to reward a life well planned, but it won’t be if you don’t have enough savings. Studies show most of us don’t. Financial planning experts say it’s never too late to start saving and investing for retirement or working to improve your outlook. If you’re worried about your financial future, now is the time to plan ahead.

The financial planning industry abounds with recommendations for how much money it costs to finance a comfortable retirement: 80 to 110 percent of the annual salary you made during your peak earning years; 20 to 25 times your final salary for those who will rely solely on Social Security and personal savings.These rules of thumb make general assumptions about post-work years, estimates that often aren’t much help for individuals. That’s exactly the reason Leonard F. Valletta, CFP, of Albany Financial Group, doesn’t like them.

“It’s not a simple answer, as much as we’d like it to be,” says Valletta. “It differs for everyone and comes down to what your expenses will be.”

Retirement planning is a balance between financial resources and lifestyle. For some people, retirement dreams include living a simple lifestyle. Others might expand their lifestyle.

In retirement, basic expenses can change. You may not need business clothing or to take care of children at home. But home maintenance and health care costs may increase, and you may pick up new expenses, like premiums for long-term-care insurance.

To know how much you’ll need, add the cost of your desired retirement lifestyle to your expectations of basic living expenses. If your anticipated retirement lifestyle included downsizing, put the difference into savings.

While most Americans will receive Social Security benefits, these payments were never intended to support a comfortable lifestyle. For people who worked all of their adult lives at average earnings and retired at 65 in 2012, Social Security benefits replaced about 41 percent of past earnings.

Most employers offer tax-advantaged workplace retirement plans, which can be powerful tools to build retirement savings, especially if they offer matching contributions. Bill Losey, CFP, owner of Bill Losey Retirement Solutions, says the best advice to help people kick-start retirement savings is that the government and your company are not going to take care of you. Gone are the days of your parents’ pension plans. Your financial well-being is your responsibility.

Most financial planners say you need to save 10 to 20 percent of whatever you make. When consumers who don’t have great cash flow or have a lot of expenses hear those things, they just tune out and say I can’t save anything, Losey says. He combats this by offering his own rule: Save 1 percent of your earnings each payday at a minimum.

“Let’s say you get a 3 percent increase at work; save 1 percent and spend the other 2 percent.That way, you’ll continually increase your savings rate, but you’ll also enjoy a higher standard of living.”

Losey’s second rule: Make savings automatic, a habit that will improve your chance of savings success.With payroll deduction, saving is effortless. Pay yourself first—the most important rule of personal cash management. If you don’t have a workplace plan, have money automatically paid from your checking account into an IRA.

“If you automate the process and you get in the habit of saving money, all of a sudden you actually start to feel better about yourself, and you will see your net worth rising,” says Losey. “As your net worth rises, so does your self-worth and your confidence, and you end up making more and saving more.” © CTW Features

The $100,000 Inheritance

Where would you stash the cash? Here are the top 10 choices of adults asked to name up to three spending priorities in an online poll:

1. Pay off any existing debt/loans (59 percent)
2. Save for a rainy day fund/unexpected expenses (42 percent)
3. Invest toward my retirement (33 percent)
4. Go on vacation (19 percent)
5. Donate to charity (18 percent)
6. Buy a car (17 percent)
7. Treat myself to something I would not normally spend money on (15 percent)
8. Buy a house (13 percent)
9. Pay for my kids’ college (10 percent)
10. Go back to school (6 percent)

Source: Harris Interactive online survey of 2,307 adults, August, 2012