Ask Carrie by Carrie Schwab Pomerantz

Dear Carrie: I'm 37, single and make $90K. I've saved about $40K in my 401(k) and IRAs, but I'm concerned I'm not saving enough. In a recent article, you stated that a couple who saved $395K by age 45 would be off to a good start -- does this mean I should save $35K a year for the next 10 years? Yikes!

What's the best plan for someone my age? Should I invest more in my Roth or in my 401(k)? I'd still like to retire by 65. Is that reasonable? -- A Reader

Dear Reader: No need to panic! With the start you have, retiring at 65 is reasonable -- as long as you put a solid savings plan in place and stick with it. Because when it comes to retirement savings, how much is enough is a personal question. It all depends on how much you plan to spend.

So first ask yourself: What does retirement look like to you? Will you need more money to live on during retirement than you make now? Could you be content with less? Your answers will help determine how much you need to save to produce the income you want.

While the idea of "enough" varies with each individual, there are some savings guidelines that can help you reach your personal retirement goal. Start following them now, and chances are you'll be well prepared for the future.

HOW MUCH TO SAVE

You've got a great start, but depending on how you answer the questions above, I suspect that you need to get even more serious about saving. Assuming you want to maintain your current lifestyle in retirement, at your age you should aim to save between 15 percent and 20 percent of your yearly salary. For you, 20 percent would be $18,000, not $35,000. Stick with this percentage over time and, as your salary increases, you'll automatically save more.

WHERE TO PUT YOUR MONEY

It's great that you already have a 401(k) and a Roth. These tax-advantaged accounts are the best way to make your money grow because earnings compound tax-deferred or tax-free, in the case of a Roth IRA. I recommend that you start with your 401(k). Not only does a 401(k) (or a Roth 401(k), which some companies provide) often have the benefit of a company match, it also has the advantage of putting your savings on autopilot (of course, you can also set up automatic deposits to your IRA).

Since you have both types of retirement accounts, you might consider dividing your contributions in this way to make the most of each:

-- First, contribute to your 401(k) up to any company match.

You certainly don't want to turn down free money.

-- Next, put the maximum contribution in your Roth IRA (currently $5,000). This diversifies your savings and will give you the benefit of tax-free withdrawals in the future.

-- Finally, if you can, contribute up to the 401(k) maximum, which is currently $16,500.

If you're able to max out both of these accounts, you'll save $21,500 a year. In your case, that's 23 percent of your salary, which would put you on a really solid path toward retirement. And that doesn't even take your company match into account.

MORE WAYS TO SAVE

Of course, it's not easy to put away this much money all at once, especially if your economic responsibilities change. But what you save and spend now may well be the most important factors in achieving your retirement goals, so it's definitely time to ramp up your savings.

Here are some ideas:

-- Earmark a portion of any salary increase for your 401(k) and/or IRA. For instance, increase the percentage you put in your 401(k) every time you get a raise. Because your contribution is pre-tax, a small increase won't significantly reduce your take-home pay.

-- Invest any tax refunds in your IRA.

-- Put other windfalls, such as an inheritance or annual bonus, toward your retirement savings.

And look for other small ways to save. Restaurants, transportation, gym fees, Internet and phone fees -- many of these costs can be trimmed to increase your savings.

USE REAL NUMBERS

It always helps to have real numbers in front of you. Try an online calculator. You can plug in your current savings, your salary, when you want to retire and how much you plan to save each year to see how much money you can realistically accumulate.

By planning now and making savings a priority, you have a very good chance of reaching your goal. Best of luck!

Carrie Schwab-Pomerantz, CERTIFIED FINANCIAL PLANNER (tm) is president of the Charles Schwab Foundation and author of "It Pays to Talk." You can e-mail Carrie at askcarrie@schwab.com. This column is no substitute for an individualized recommendation, tax or personalized investment advice. To find out more about Carrie Schwab-Pomerantz and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com. COPYRIGHT 2009 CHARLES SCHWAB & CO. INC. MEMBER SIPC