One of the scariest things you can experience happens when you start closing in on retirement age and realize that you have not saved up enough money.

Many thoughts start to race through your mind: Will I have enough to take care of myself? Will I have the chance to do the fun things that I'm supposed to be able to do at retirement? Will I really have to buy the book 72 Ways to Prepare Alpo and Love It?

If this is you, don't panic. You still have some time to get things in order. It might mean that you won't be able to retire at age 65, but if you start this instant and focus on getting ready for your golden years, then there will still be some gold in them.

Step 1

First, sit down tonight and write out your money situation. List your income, the debts you have, and any savings you've built up. Get on a budget and spend every dollar you make on paper before the month begins. If you don't know where your money is going each month and feel like you have no control, then this is the best way to get control. Get Dave's free budgeting forms here.

Step 2

Once you have listed your income, debts and savings, look for ways to trim the budget. If you have car loans or rental properties, then selling these to get rid of the debt is the quickest way to improve your situation. If you are driving a $25,000 car and the payments are $500 a month, then sell it and get a $3,000 beater car. You may not like the idea of going from a nice car to a not-so-nice car, but you'll like the idea of retiring with no money and lots of debt even less. Plus, when you get rid of a $500 monthly payment, you'll feel much better.

Step 3

Once you've found ways to amputate your lifestyle (don't forget to cut unnecessary expenses out of the budget to free up more cash), start working the Baby Steps. Save $1,000 for a starter emergency fund quickly. Then start on your debt snowball and pay off your debts smallest to largest. Once you're debt free except for the house, finish off your emergency fund (3-6 months of expenses).

Step 4

Now comes the part you've been wringing your hands over. Start putting 15% of your pre-tax income into retirement. If your company matches your 401(k) contributions, contribute just enough to get the full match. Next, fully fund a Roth IRA (or two, if you're married). If you're 50 or older, you can put in some extra "catch up" money (an extra $1,000 per year). Get to this step as fast as you can so you can invest and let the compound interest work for you. If you invest $5,000 a year in a Roth IRA from age 55 to 68, you'll have $181,000. But if you can get to Baby Step 4 by age 52 and start then, you'll have $273,000, tax-free at age 68!

To boot, the sooner you can get to Baby Step 6 and pay off the house, the quicker you can put the house payment into a mutual fund and have even more money. Don't wait, and don't lose hope. Get "gazelle intense" now so you can enjoy your retirement later!

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