Don't Worry, Be Ready

With a toddler at home and a baby on the way, Layla Masri, a 33-year-old Web-design-firm president, has a lot on her mind while standing

Even the most money-savvy moms often neglect retirement planning, says Harold R. Evensky, chairman of the financial-planning firm Evensky & Katz. "It's hard for a working mom to find the money to sock away, as well as the time to chart her future." But consider this: Your retirement is likely to last almost as long as your working life. People are living longer; plus, the future of Social Security is looking less secure. So start now, with our three-step plan:

1. The first step toward retirement planning is accepting its importance. "You want the very best for your children, and that's fine, as long as you're also putting money away for you," says Diana Kahn, president of the Financial Pharmacist, Inc., in Aventura, FL. Saving may get more difficult as your children get older-diapers seem inexpensive stacked against the cost of braces, college tuition and trips to the mall. So start saving when your children are small to give the money more time to compound, a key factor in building your retirement nest egg. If you save $2,000 a year for the first ten years of your career at g percent interest, you'll end up with $440,000 at age 65, points out Harry Rubins, a financial consultant at Rubins Financial Strategies of Santa Rosa, CA. But put away $4,000 a year during your last 20 years and you'll end up with only $233,000.

Retirement should even trump your child's education fund, says Kahn. "Absolutely save for college," she says, "but know that for your kids you have options-scholarships, grants, work-study programs. When it comes to retirement, though, you're on your own, baby."

2. Next, figure out how much money you're going to need by visiting a financial-planning website, such as American Savings Education Council at www.asec.org, to get a rough estimate. Then you might want to check in with a financial planner to come up with a savings plan, especially if you're self-employed or in a non-traditional workplace.

Depending on your work, start by opening a 401i(k), 403(b), SEP-IRA or Simple IRA and contributing as much as you can. If your company matches, be sure to put in at least that much. A rule of thumb is about 10 percent, says Kahn, but it varies per individual. "It is better to put something away than to get discouraged over a specific number and not put anything away at all," she says. If dedicating 10 percent of your salary just isn't an option, find creative ways to save any way you can. Give up your $4-a-day latte habit-it may seem like a pittance, but it adds up. Or talk yourself out of shoe-shopping splurges. If you don't go into the store, you're sure to save. The earlier you start putting money away, the more you'll have when retirement comes-even if you take breaks from putting money into the fund.

3. Then, stay on top of your nest egg. Check in on your investments at least annually to be sure accounts like 401(k)s are performing the way you want. "If there's been a shift in how much you're saving, it may be time to move your money around," says Evensky. A shift can be anything from one type of investment growing more quickly to changes in interest rates to unplanned life events that bring about unexpectedly large expenses.

To accommodate these shifts, you might need to move money from, say, stocks to bonds to lower your risk. Find a trusted financial advisor-an accountant, financial planner or tax counselor-who can help walk you through the possibilities. There are tax implications as well (401(k) savings are tax-deferred). So have an expert help you decide how much to put into retirement each year, since there are many potential tax-saving applications. A yearly check-in with this advisor will help you feel better about your financial future-and can keep you on track for a relaxing retirement. -Mark J. Miller