OK, the title of this article sounds rather negative, but there's a lot of good news for young people today. The younger you are, the more you have of a critical wealth-builder: time. If you're 45 years old and reading this article, don't let yourself think you're too old to invest meaningfully. Much of the money you invest today can grow for some 20 years before you retire, and perhaps 10 to 20 more years after that. You're in a better position than a 60-year-old reading this (who's in a better position than an 80-year-old, and so on).

But back to young people -- and by young, I mean those in their 20s or perhaps 30s. (For those in their teens, I recommend spending time in our Teens and Their Money nook.)

If you're 30, you have 30 whopping years until you hit the pre-retirement age of 60. If you're 25, you have 40 years until age 65. These time spans are powerful. If you invested in Coca-Cola (NYSE:KO) 35 years ago, your money would have grown at an annual clip of around 12%, enough to turn a $10,000 investment into half a million dollars.

Mutual funds could have served you well over that period, too. The Sequoia Fund (SEQUX), for example, would have turned $10,000 into nearly $2 million. It's closed to new investors today, but it beat the S&P 500 by three percentage points last year. Among its top holdings, the fund recently sported TJX (NYSE:TJX), Target (NYSE:TGT), Walgreen (NYSE:WAG), Fastenal (NASDAQ:FAST), Costco (NASDAQ:COST), and Danaher (NYSE:DHR). (If you're in the market for top-notch mutual funds, Shannon Zimmerman has some tips for you in "7,000 Funds, So Little Time.")

The bad news
But I can't put off the bad news anymore. I just read this disheartening statistic: 43% of working households are likely to be at least 10% short in meeting their income needs in retirement. The picture looks bleakest for those in Generation X, according to the National Retirement Risk Index of Boston College's Center for Retirement Research.

There are several reasons why. It's not that they aren't saving at the same rate as their elders -- it's that they face a different future. Their Social Security benefits are less certain, and will likely begin at a later age (since the age at which those born in or after 1960 can begin receiving maximum benefits is now 67). They're also much less likely to have any kind of pension to count on, and they're expected to live longer than their forebears, too. Longer life means more money will be required.

Note, too, that this isn't really just a problem for the young. Millions of us of all ages face underfunded retirements if we don't get our acts together. It's just that young people in general face a higher hurdle.

Solutions abound
Fortunately, all is not lost. We all can stave off rickety retirements by (drumroll, please) saving more! And by working longer and saving as effectively as possible. If you can sock money away into tax-advantaged accounts such as 401(k)s and IRAs, it makes a lot of sense to do so. For some of us, converting some of our nest eggs into annuities can make sense. For others, a reverse mortgage might be wise.

If you're interested in getting a lot of solid advice on retirement planning, permit me to offer a suggestion: Try out our Rule Your Retirement newsletter, which happens to be the retirement guidance source that I refer to most often -- a free trial will give you access to all past issues, many of which feature stories about people who retired early and who share their secrets.

Here's a sampling of some very useful articles from past issues:

  • In the June 2006 issue, newsletter editor Robert Brokamp addressed international investing, re-recommending an international mutual fund that advanced some 50% since he first mentioned it back in December of 2004.
  • In the January 2006 issue, Robert tackled asset allocation and explained how we can "avoid Uncle Sam's grabby hands." He listed a host of popular investments, such as bonds and dividend-paying stocks, in order of tax efficiency.
  • In the May 2005 issue, readers were taught how to withdraw money prudently in retirement, in order to make it last.
  • The October 2005 issue delved into dividends and recommended some dividend payers.

These articles may also be of interest:

Here's to a wonderful retirement!

(Consider forwarding this article to anyone you care about. Just click on the orange "Email this Page" box near the top of the article.)

Costco is a Motley Fool Stock Advisor recommendation, and Coca-Cola is a Motley Fool Inside Value pick. Whatever your investing style, The Motley Fool has a newsletter just right for you.

Longtime Fool contributor SelenaMaranjian 's favorite discussion boards include Book Club , Eclectic Library, Television Banter and Card & Board Games. She owns shares of Coca-Cola and Costco. For more about Selena, viewher bio and her profile. You might also be interested in these books she has written or co-written:The Motley Fool Money GuideandThe Motley Fool Investment Guide for Teens. The Motley Fool is Fools writing for Fools.