Five Tips for 20-Somethings to Save for Retirement

Joseph Birkofer, a financial planner at Legacy Asset Management in Houston, suggests putting at least 7% of your gross pay into such an account to match your contribution to Social Security and Medicare.

Use automatic deposits from your check or bank into your IRA. That way, you don't have to put in the effort of manually depositing funds and won't be tempted to use them toward another purchase.

Put yourself in their shoes. Find it hard to justify saving money for something so far off in the future? Imagine yourself as a retiree and how it will affect your family and lifestyle. Birkofer suggests thinking about how your grandma, great-uncle or local retirees pay for lunch.

"There's only three places to get money besides stealing it or winning the lottery: the government, whatever you did yourself or from your family and your kids," he says.

If you don't want to rely on Social Security's shaky outlook or the unattractive option of burdening your family, being financially independent through your golden years can only come from the initiatives you take now.

Don't get burned. When choosing a fund, make sure to balance risk.

Some want to chase higher returns with riskier funds, but starting out slow might make more sense -- especially for those who are hesitant to start saving in the first place.

Birkofer suggests young investors build up a core of $15,000 to $20,000 in a balanced retirement fund, then start exploring funds that are weighted in international or emerging-market investments.

"We lost almost a generation of investors because of the dot-com bomb and it's taken them years to come back to the market," he notes.