Working on It - Your 30s Through Your 40s

It's critical to find a way to squeeze out dollars for retirement. Time is still on your side, but you've begun to lose some of your compounding power. Try to invest a minimum of 10 percent of your salary toward retirement.

Retirement Vs. College Savings

One of the classic conflicts is saving for retirement versus saving for college. Most financial planners will tell you that retirement should be your top priority. Your child can usually find financial aid to help fund their education. You'll be on your own for retirement.

Necessary Expenses

Some expenses shouldn't be avoided. Financial catastrophes could seriously derail your retirement plans, so be sure to have:

• Adequate life insurance to protect the continuity of your financial plan should you die.
• Disability insurance to replace lost income if you can't work.
• Adequate health insurance to protect you when you get sick.
• A three to six month cash emergency fund, set aside in a savings account to pay for fixed and essential living costs.

Investment Portfolio

Your investment portfolio probably shouldn't change much from when you were in the Getting Started stage. You still have considerable time before retirement, even if you plan to retire early.

Please Note: Avoid tapping into your retirement accounts for such things as a home down payment or college. You can end up paying income taxes and penalties, and you'll suffer the loss of further tax deferral.