Whether you have just entered the workforce or have been part of the daily grind for some time, retirement can seem daunting. However, the idea doesn't have to be a pipe dream.

The key is to change your mindset and start planning. Here are some steps to help you get started, no matter what stage of life you're in.

People looking at charts.

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 1. The early bird

Ideally, you've started investing for retirement early. There are lots of reasons to delay saving for the future, but it's important to get started. Even if you've waited, it's never too late.

There are various long-term investing approaches, but ultimately you can afford to invest in assets with higher volatility, such as stocks, than other classes if you have more time until retirement. While equities may fluctuate, even falling sharply such as they did last year, when the S&P 500 dropped by more than 32% from late February to late March, these smooth out over time.

For instance, from 1971 to 2020, the index produced a nearly 11% average annual return. That includes the 1970s stagflation, recessions, wars, and a global pandemic that's still going on.

2. Traditional tax-deferred saving

Many employees offer retirement programs such as 401(k) plans. These provide several advantages.

For starters, your employer deducts the amount automatically from your paycheck, making it convenient to save for retirement. You can also have the funds taken out pre-tax, meaning you get immediate tax savings. Employers may match your contribution within certain limits. For instance, they could decide to fund 50% of what you contribute, up to 6% of your salary.

Then, your investments grow tax-deferred, meaning you don't pay taxes until you withdraw the funds. This is a nice advantage when investing for retirement.

Even if your employer doesn't offer a retirement plan or you're self-employed, you can invest in retirement savings vehicles, such as individual retirement accounts (IRAs).

3. No taxes later

While a traditional retirement plan offers immediate tax savings, a Roth 401(k) or IRA doesn't give you that benefit. However, these plans allow you to withdraw your funds at retirement tax-free, and both allow your investments to grow tax-deferred.

No one knows what the tax code will look like in the future. For instance, in the early 1990s, the tax rates were 15%, 28%, and 31%. These changed throughout the years, currently ranging from 10% to 37%. Certainly, rates could end up higher than today when you are ready to retire. Given this uncertainty, you could invest your retirement saving in a traditional retirement plan and a Roth option. That way, you've hedged your bets.

Once you've set up your retirement accounts, you should continue to take an active role. This means periodically looking at your investments to make sure they align with your retirement goals. For instance, as you get older, you may wish to invest less aggressively. This could mean choosing to put a greater allocation in fixed-income areas and less in stocks.

Starting to save, investing whatever you can, and growing your investments tax-deferred is a solid, steady approach to reaching your retirement goals.