Retirement is for old people.

I heard one of my 20-something friends say that recently. I nearly gagged.

Actually, few things are further from the truth. Sure, like most Americans, you and I are probably not going to retire for several years. According to the Bureau of Labor Statistics, the average retirement age is around 62 -- which means I'm decades away from saying goodbye to the working world.

But here's the thing: Retirement is most decidedly not for the elderly. In fact, the earlier you think about retirement, the faster you'll get there.

Face it: If you're in your prime working years, you'll probably never see Social Security benefits (except maybe on a PBS documentary about the 20th century). Pension plans will have gone the way of the leg warmer when we're ready to retire. Mom and Dad will have enough to do to take care of themselves, so don't look to them for any handouts. You'll have to rely on all those savings you've been putting away.

Wait ... you've been saving money along the way, right? Maybe not. According to Tamara Draut of the Demos think tank, 60% of young adults in Generation Y are struggling for financial independence.

Don't panic
It's never too early -- or too late -- to start funding your retirement. With Social Security and defined-benefit plans disappearing, you can no longer trust the federal government or your employer to take care of you. You're on your own.

Don't be frightened by that, because here's the upshot: Controlling your own retirement destiny could make for some serious money. (You think you can make more money than the federal government or your employer could for you? Yeah, me too.)

$1,000 down, $30,000 extra in 40 years
Let's use this example -- a measly $1,000 in a retirement account for 40 years. Here's a table of my retirement funding plan, if I assume that all of my investments will revert to the market average over the long term:


Average S&P annual return

































As you can see, earning just a minimal growth rate of 9% (the market average over the long term) results in $31,409. And this is just if I invest $1,000 and let it sit for 40 years at that rate. Contributing $1,000 every year for 40 years at that rate grows the final value exponentially to $369,291!

What's $1,000 a year? A cup of coffee a day, a couple of burgers a few times a week. Even if you're living on a shoestring budget with car bills and child care, it is possible to invest this minimal amount.

And it's easier than you might think to find an annual growth rate of 9%. Many well-known companies have long-term returns around the market average -- Intel (NASDAQ:INTC), Nike (NYSE:NKE), General Electric (NYSE:GE), and Target (NYSE:TGT) all had 10-year compound annual growth rates of approximately 9%.

But wait -- there's more
In addition to starting today, here's something else you can do: Have the savings deducted automatically from your paycheck. Several brokerages and banks will auto-deduct predetermined sums of money from your checking account into, say, your S&P 500 index fund.

And where else you can cash in? Taxes. That's right, good old Uncle Sam. By contributing to an IRA or a Roth IRA, you can take advantage of certain tax benefits, depending on your current income level and tax bracket.

Investing is serious business. Smart investing can help you reach your golden years faster. For instance, stuffing those IRAs with a sure-but-safe mutual fund like the Vanguard 500 Index Fund (FUND:VFINX), whose top holdings include ExxonMobil (NYSE:XOM) and Microsoft (NASDAQ:MSFT), will give you the market average mentioned above (9%). Depending on your timeline and risk temperament, you can hedge those safe bets with something a little more risque (small caps or international stocks, to name two).

Foolish bottom line
You're not getting any younger, so the time to start planning for your retirement is now. Save. Invest. Save some more. Let the power of the stock market work for you. Of course, retirement isn't that simple -- you'll also need to optimize your asset allocation, avoid unnecessary taxes, and figure out withdrawal rates. But saving and investing will take you a long way down the retirement road.

For specific stock and fund tips, strategies, and success stories, you can also check out our Motley FoolRule Your Retirement newsletter service. Editor Robert Brokamp gives you solid advice on how you can plan for retirement, and Foolish stock pickers help you find places to park your money. In fact, the newsletter's recommendations have outperformed the market's average by more than 5 percentage points over time (totaling a more than 17% return). That's worth a look, don't you think?

Retirement isn't for old people. In fact, the earlier you start planning, the faster you'll get to the finish line -- the faster you'll be lying on a beach in Mexico sipping mojitos.

A 30-day free trial gives you full privileges to the Rule Your Retirement service -- including the brand-new issue, which will be released this Thursday. Click here for more information.

Fool research analyst Shruti Basavaraj owns shares of Microsoft. Microsoft is a Motley Fool Inside Value recommendation. The Fool's disclosure policy sponsored this message.