Act now to build up retirement savings

Jeff and Kathy Delaplane's two children are grown and out of the house, though not necessarily out of Jeff's wallet, as he likes to joke. Still, as empty-nesters, he and Kathy are stashing away as much as they can for a comfortable retirement. They hope to begin a life filled with golf, bridge and volunteer work in about five years.

The Delaplanes, who are both in their mid-50s, are on track to replace nearly 100 percent of their earnings when they retire, thanks to a combination of savings, Social Security, Kathy's pension and a lump-sum payout Jeff will get when he leaves the agency that he runs for American Family Insurance. That's nearly double the percentage of preretirement income most retirees can expect, according to Fidelity Investments. It's also well above the 75 percent that advisers often recommend to cover health-care costs, travel, hobbies and other activities.

Jeff invests the maximum allowed in his company's retirement plan, taking full advantage of the higher contribution limit for workers age 50 and older. With his employer's matching contributions, he's socking away 13 percent of his income — nearly twice as much as the typical 401(k) participant sets aside.

Workers should save at least 15 percent of their salary for retirement throughout their careers and even more if they get a late start. Jeff and Kathy will probably sell their big house and move to a condominium, but they'll stay in Bloomington, Ind. They'll add the extra cash from the home trade to their nest egg, which they hope will reach $1 million.

• Contribute at least enough to your 401(k) plan to capture your employer's match and preferably up to this year's $15,000 maximum.

• Play catch-up by contributing an extra $5,000 annually if you're over age 50.

• Plan to stay on the job longer. Not only will you increase your retirement savings, but you'll also reduce the number of years in which you'll need the money.

• Invest for growth by keeping most of your assets in stocks or stock funds. That's the only way you'll earn the 7 percent or more that you'll need to make your savings last.