What did you do with your first paycheck: splurge on some long-awaited purchase, or put it aside to prepare for your 65th birthday?

In a perfect world, you would've started saving for your retirement as soon as you got your first job. In reality, though, what's much more common is for people to put off saving for retirement too long. According to the Employee Benefits Research Institute, 45% of older workers have saved just $25,000 or less toward their retirement. And although the current problems in the economy have pushed more people to save more, many have a lot of catching up to do.

Solve your savings blues
But it's not impossible. If you've been putting off getting started with an investing plan tailored to meet your financial needs in retirement, there are several things you can do to jump-start yourself into action.

1. Get out of debt.
Not so long ago, the idea of retiring while still owning debt was unthinkable. Now, though, it's a common problem. According to a recent study, 22% of baby-boom generation members have debts of $50,000 or more -- and that doesn't include what they owe on their mortgages. While less than one in five people expect to enter retirement while still owing money, over half of current retirees say they still had debt when they first retired.

Even with the protection from the recently enacted credit card law, paying down debt usually pays a better return than making investments. If you have bad debt, make getting rid of it a top priority.

2. Max out your savings.
The government knows that many people haven't done enough to provide for themselves in retirement. That's one reason why the best vehicles for retirement savings -- IRAs and 401(k) plans -- make special provisions for late starters.

If you're 50 or older, you can put an extra $1,000 into an IRA this year, above and beyond the $5,000 limit that applies to others. 401(k) plans offer a similar incentive, but the extra contribution available is much bigger: $5,500, brining the total amount that someone 50 or over can save in a 401(k) to $22,000.

3. Get back into the market.
But it's not enough just to dump money into your retirement accounts. You also have to be smart about investing it. Despite the fact that many employers have taken steps to enroll participants and invest their money automatically, many workers still hold too much money in money-market funds and other conservative choices.

Especially if you're getting a late start, you should consider whether you can take on more risk than others your age. That may mean not just sticking with blue-chip stocks such as IBM (NYSE:IBM) and Microsoft (NASDAQ:MSFT) but also diversifying with smaller growth-oriented companies like Dynamic Materials (NASDAQ:BOOM).

4. Think about income.
But just because you're getting a late start doesn't mean you should invest recklessly. One reason why older investors turn to dividend-paying stocks is that they offer two ways to make money: Share prices often rise over time, while companies also often increase dividend payouts from year to year as well.

For example, take a look at these long-time dividend payers:


Consecutive Years of Higher Dividends

Current Dividend Yield

Dividend Increase Since 2004





McDonald's (NYSE:MCD)




PepsiCo (NYSE:PEP)




Kimberly-Clark (NYSE:KMB)




Source: Yahoo! Finance, DividendInvestor.com.

Not only have these shares provided steady income for investors; they've also grown at double-digit rates over the long haul.

Start today
By getting a late start on your retirement saving, you put yourself at a big disadvantage. You have a lot of ground to cover, so don't wait another day. With determination and the right strategy, the effort you make will make a big difference to your quality of life after you retire.

For more on investing for retirement and beyond, read about:

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Fool contributor Dan Caplinger bought a convertible right out of college, but he made up for it later. He doesn't own shares of the companies mentioned. 3M and Microsoft are Motley Fool Inside Value picks. Kimberly-Clark and Pepsico are Motley Fool Income Investor recommendations. The Fool owns shares of Dynamic Materials, which is a Motley Fool Hidden Gems pick. Try any of our Foolish newsletters today, free for 30 days. The Fool's disclosure policy is rich with information.