Saving enough for retirement takes decades for most people, but it doesn't take nearly that long to put a plan in place. You can build a solid retirement plan in just one day if you're motivated. Then, all you have to do is stick with it. Here are three steps you can take to get started.

1. Figure out how much you need for retirement

You need an idea of how much retirement will cost to know if you're saving enough each month. You can't determine exactly how much you'll spend in retirement because there are so many variables at play. But it's possible to come up with an accurate estimate.

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First, you need a rough idea of how much you'll spend monthly in retirement. You can use your current monthly budget as a baseline, but know that your expenses will probably change between now and retirement. You might spend more on some items, like medical care, and less on others, like child care. Try to anticipate these changes.

You probably won't have to pay for retirement all by yourself. You'll get some money from Social Security and maybe from a pension as well. This will reduce how much you have to save on your own. You can estimate how much you'll get from the government every month by creating a my Social Security account. And if you qualify for a pension, you can talk to your employer to figure out how much that might be worth.

You'll also get some money from investment earnings. How fast your money grows depends on what you invest in, but it's usually best to be conservative in your estimates. Plan for a 5% to 6% average annual rate of return so that if there's a market crash or something else that causes your investments to grow more slowly, your whole plan isn't derailed.

Lastly, you need a sense of your life expectancy and when you plan to retire. It's always best to plan for a long life (usually until at least age 90) unless you believe you won't make it that long. As for when you plan to retire, choose any age for now. If you realize your initial plan isn't feasible, you can always make changes later.

Once you have all this information, use a retirement calculator to help you figure out how much you need to save per month and overall to reach your retirement goal. If the goal feels out of reach for you, you might need to consider delaying retirement or making other changes until you find a plan that works for you.

2. Choose the right retirement accounts

Once you know how much you need to save, you have to decide where you're going to stash those funds. Choosing the right retirement account is crucial because it affects when you pay taxes on your savings and how much you end up with overall.

A 401(k) is usually the best place to start if you qualify for an employer match. This extra money can help reduce the amount you need to save on your own, and it might enable you to retire even sooner than you originally planned.

If your 401(k) doesn't have a match or you don't have a 401(k), an IRA might be a better choice. Anyone can open and contribute to one of these as long as they're earning income during the year or married to someone who is. IRAs also give you more investment options, and they usually have lower fees. 

The only downside to IRAs is their low contribution limit. You may only contribute up to $6,000 per year, or $7,000 if you're 50 or older, while 401(k)s allow you to contribute up to $19,500 in 2021 or $26,000 if you're 50 or older. The 401(k) contribution limits will rise to $20,500 and $27,000, respectively, in 2022. If you end up maxing out your IRA, you might want to switch back to your 401(k) if you have one.

Those who save in an IRA will have to choose between a tax-deferred traditional IRA and a Roth IRA. You might have to make a similar choice with 401(k)s as an increasing number of employers are offering a Roth 401(k) option.

Contributions to tax-deferred accounts reduce your taxable income for the year, but you pay taxes on your withdrawals later. This is usually a better option for those who think they're in a higher tax bracket now than they'll be in once they retire. Otherwise, Roth accounts are usually the better choice. Your contributions to these accounts don't earn you a tax break today, but you get tax-free withdrawals later on.

Other types of accounts you may want to consider for your savings include:

  • Health savings accounts: While technically not retirement accounts, these offer many of the same tax breaks. But they're only available to those with high-deductible health insurance plans.
  • Taxable brokerage accounts: Taxable brokerage accounts also aren't retirement accounts, and they don't offer the same tax advantages. But there are also no restrictions on how much you can contribute or when you can withdraw your funds. This makes them popular with people who plan to retire before 59 1/2, the age at which the 10% early withdrawal penalty on most other retirement accounts disappears.

3. Set up automatic contributions

Automating your retirement contributions eliminates the risk that you'll forget to make them. With a 401(k), setting up automatic contributions is pretty easy. You tell your employer how much to contribute and it automatically withholds that amount from each paycheck.

If you'd like to set up automatic contributions to an IRA, you might have to link a bank account and set up a contribution schedule, but it's usually doable. Try to plan this for a time when you know you'll have adequate funds in your account.

If you follow the tips above, you should have a pretty solid plan for retirement, but you have to actually stick with it if you want it to work. Make your contributions every month and review your retirement plan annually to see if you need to make any adjustments. You should see slow and steady progress toward your goal over time.