suze orman
Photo: Robert Trachtenberg
With so many steps involved in building financial security, it simply isn't possible to do everything at once. Knowing which of your goals to tackle (owning a home? saving for retirement? paying for college?) and when to do so has never been more important. The Employee Benefit Research Institute, a nonpartisan think tank, reports that the proportion of workers ages 25 and over who have saved for retirement has fallen from 78 percent to 66 percent over the past 12 years. Meanwhile, an AARP study notes that the number of retiree households with debt has increased sharply: In 1989 one in five families with a head of household age 65 to 74 had mortgage debt; by 2010 that number had reached 40.5 percent.

Is it tough to tackle long-term goals when you're struggling to pay everyday expenses? Of course. But as we kick off a brand-new year, I ask that you do your very best to keep a brighter, more solvent future in your sights. Adopt the following age-specific tactics before you make any other moves to build the financial security you need and deserve, one decade at a time.

In Your 20s

You absolutely for retirement.

Yes, you're scrambling to pay the rent. But please listen to me: Pushing yourself to save even a small amount now is, hands down, the single smartest investment play you can make. It's all about the time your money will have to marinate— "compounding" is the technical term—before you need it in retirement.

In a perfect world, let's say you invest $5,000 a year starting at age 25. Assuming your money grows at an annualized 6 percent, you'll have approximately $820,000 by the time you're 65. Now let's suppose you don't start investing until age 35. You'll have to sock away about $9,800 a year to wind up with the same nest egg. (A $5,000 annual investment for 30 years will yield just $419,000.) And don't kid yourself that it's easy to save money as you grow older; you'll likely have children and a mortgage tugging at your purse strings.

Under no circumstances should you...fall behind on student loan payments.

Even if you were to declare bankruptcy, your debt would likely not be forgiven. If you're having trouble paying your bills, go to to learn about deferment and forbearance options.

In Your 30s

You absolutely honest about whether you're ready to settle down in your own home.

Don't let today's historically low mortgage rates seduce you into ownership. Just because something is on sale doesn't mean you should buy, right? Besides, the Federal Reserve has indicated that it intends to keep interest rates low until mid-2015, so there's no need to rush.

I also wouldn't jump at buying if you're considering moving within the next five to seven years. (It could take at least that long for your new home to appreciate enough to recoup the costs of selling it, including a 5 to 6 percent real estate agent commission.) But if you plan to stay put, and you can cover a 20 percent down payment, focus on buying the least expensive property that meets your needs. The difference between a $300,000 30-year mortgage and a $270,000 30-year mortgage at today's rates is $133 a month. That's nearly $1,600 a year you could apply toward other goals. (Remember your laundry list?) Use the mortgage calculator at to see how much you can save by keeping your purchase price in check.

Under no circumstances should you...set aside money to pay your children's educational expenses if your retirement savings are not on track.

Next: Saving for retirement in your 40s, 50s and 60s


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