Most retirement planners will agree that if your employer offers a retirement fund, especially if they are willing to match your donation to it, you should opt to put at least the maximum match amount in your fund every year. Think about it. If you begin putting just 5% of your annual income towards your retirement in your mid-twenties, and your employer adds 5% once you add compounded interest, you should easily have over half a million dollars saved by the time you are sixty.
Another critical factor in correctly managing your retirement funds is to plan to go into retirement debt free. That means your home, cars, credit cards, and any lines of credit are paid off in full. Completing this step is essential for several different reasons. First, it will give you a much clearer picture of what your actual monthly expenditures are. From there, you can add to your budget luxury items such as a new car every three or four years or vacations with family and friends.