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My brother, a long haul truck driver, dropped in this past weekend accompanied by his co-driver, Jeremiah Johnson (yes, that’s his real name for those of you who remember that movie.) During good meals and good conversations we came around to the topic of retirement.

Jeremiah had this to say about that:

“I don’t understand. People work their whole lives and make good money. Why do so many of them struggle financially when they retire? Where do things go wrong?”

Two days later I shared this conversation with my son, who then told me he had just encountered an elderly homeless couple when he stopped in a parking lot to make a phone call. He said,

“Mom, it was so sad especially because they were your age. I can’t imagine you being in this situation...how does this happen?”

Good question. But honestly, it didn’t take me long to come up with five very solid answers. See if one or two of these don’t resonate with you.

Denying the fact that you will become a senior citizen will only get you into trouble... and possibly homeless. (Hey, with some good living, good luck and a few prayers, we will all eventually become senior citizens.)

The only way to ensure a good lifestyle in your later years is to make a plan.

“Serious” debt would include a house, a car, or major credit card purchases of say, over $1,000.

Seriously, paying everything off is actually doable when you start with considering a 30-year mortgage. Yes, it will take 30 years to pay it off, which seems like a long time. But look at this way: If you buy a house when you’re 30 it’ll be paid off by the time you’re 60. All you have to do is buy the right one the first time and keep it. Just avoid the temptation to up-size because everyone else is or because you just got a raise.

Then think about buying a car. Five-year car loans really are paid off in 5 years. Again, keep the same car, do the required routine maintenance, and most vehicles will last 15-20 years.

Ok, I know some of us start out with a hand-me-down junker so this might seem a little more challenging. I get it. My first car at 16 was my family's 1963 Rambler; my last was this used 2013 Dodge Ram truck. (BTW, you save a TON of money when you buy used.)

And I know it’s easy to have a need for a larger vehicle when your family grows, and then when all the kids move out you have a desire to downsize. So yeah, you may just go through a few cars by the time you’re 50 or so, but still, if you buy your last one at that age, just be serious about its maintenance and you won’t have another car payment for the rest of your life.

Also, limit your credit card usage. There’s no doubt when they offer incentives such as 15% discount and zero interest when using their store credit card, it’s a great idea. But still try to be good and just charge what you can pay off in a couple of months. Otherwise this kind of debt can follow you right into your grave!

You must ask yourself at what age do you want to quit your job and rely on whatever you have in savings to live out the rest of your years. This is probably the most important factor in planning for a comfortable retirement. But before you decide, you need to be very clear on the government’s guidelines on what “retirement age” actually is.

First, if you plan on drawing Social Security, currently the youngest age you can do so is 62.

Second, the youngest age you can draw from your 401k or 401kRoth – without paying hefty penalties – is 59 1/2.

Also keep in mind that when you retire, your income, whatever it is, will now be lower than it was when you were working, and it’s also considered a “fixed income” meaning you will no longer be getting raises on a regular basis: it is what it is probably for the rest of your life. The good news is that you’ll be in a lower income tax bracket, therefore you pay a lot less in income taxes.

So let’s get back to when you want to retire.

In the previous example (question 3) we had you retiring at 62. When you look at how much you should save in an ideal world, you may want to work a bit longer. Of course if you find yourself in a position where you can save more, or your money grows in your 401k faster than anticipated, you could retire sooner. Only you can do the math and make this decision based on your circumstances. Everyone’s situation is different and there are no hard rules.

That said, keep in mind that you may have some other retirement income options. I’ve included an overview of a four of them in the following pages.

As I said earlier, there is no such thing as too young to save for retirement.

Seriously, set up a 401k as soon as your employer offers the option. Even if you don’t think you can save as much as you calculated, it’s better to save something rather than nothing.

I mean, I didn’t start my 401k until I was 40 because someone finally showed me the math (shown in the table below under the "401k" heading) and believe me, as a single mom with two kids, I didn’t save all that much. But I’m sure happy for what I did save. Again, it’s better than nothing.

Below I’ve described four common retirement income options to which most everyone has access. No matter which kind of retirement/savings account you choose to use, most of them will grow in interest over time, which means you will end up with a lot more money than what you actually put in. The reason for this is something called “compounded interest.”

Rather than inserting a techy definition for it, let me explain with the following simple example.

Let’s say you put $20 in savings this month. You now have $20 in savings at the end of the month. And let’s say it earns 1% interest that month, which is 2 cents.

Next month you put in another $20 for a total of $40.02. You then earn 1% interest on total combined amount of $40.02, which is .4002,or 4 cents. Now you have $40.06.

The next month you put in another $20, added to the $40.06 for a total of $60.06. The 1% interest is now being calculated on $60.06...which gets you .6 cents in interest for a total of $60.12.

Basically, the interest is always being calculated on the new total balance, not just on the extra $20 you put in each month.

This is a very simplified example, but it illustrates the point that if you start doing this even with a simple interest account, you could have a lot of money saved over the course of your 35-40 years of saving.

If you invest the money in your 401k account, it could be a lot more because most times people will put that 401k money into stocks or money market accounts that pay a lot more than 1% interest.

There’s no standard: All who chose to save do it differently based on their monthly bills and what they think they can afford. And they all choose different types of accounts whether it be putting “before-tax” dollars in a 401k account, or investing “after-tax dollars” in stocks and bonds or a 401(k) Roth account. There’s no right way to do this, just do what you feel is right for you and your situation.

Sadly, not everyone chooses to save even a dime. I would say that that’s the only wrong choice because it’s a major contributing factor to the issue of so many struggling and homeless senior citizens.

Following are simple explanations for a few of the most practical and easiest to set up options.

What’s really sad here is that I didn’t learn the difference between the two of these until I was 56 years old! You should know this sooner in life so that you make the best choice when it can really make a difference. Both of these accounts can be set up and managed by your employer.

Here are some facts and differences between the two:

The 401(k) is money deducted from your paycheck before any federal and state income taxes, and Social Security are calculated and deducted. In the long run, that means that when you pull money out of your 401(k) account you have to pay taxes on it. This is referred to as “deferred” taxes.

Surprisingly enough, this is not always a bad thing because when you retire, you no longer have that full-time, steady paycheck coming in, so your income is probably going to be a lot lower. Thus, you pay lower income taxes.

As far as I know, only an employer can set this up because only your employer can get a hold of your paycheck before taxes. But ask someone in your Human Resources (HR) department, a tax accountant or a financial planner to be sure.

Money for a 401(k) Roth account is deducted from your paycheck after all federal and state deductions are taken out of your paycheck. That means that when you retire and start taking money out of this account, you do not have to pay taxes on it. Most employers and most banks can set this up for you since you cash your check and make deposits after taxes.

While a 401(k) Roth account might sound like a regular savings account, it’s not. But it is similar to a 401(k) in these ways:

• You should not take money out of either a 401(k) or 401(k) Roth account until you reach retirement age (59 1/2 as of this writing).

• If you make a withdrawal and do not pay it back (vs. a loan against it that must be paid back with after-tax money plus interest), you will have to pay a 10 percent penalty on that money. And, in the case of the 401(k), you would also have to pay the deferred income taxes.

• You can also decide where you want the money in these accounts to be invested over the years. That can be good because you have the potential of earning a lot more interest than just the 1 percent to 2 percent that savings accounts are currently paying.

The table (shown below) is an example of three scenarios using nice, rounded numbers. It uses $50,000 per year as a salary, and 10 percent being deducted in taxes every year and what your take-home pay could look like each year depending upon how you choose to save for retirement.

You can see in the first column, if you put 5 percent into a 401(k), that would be 5 percent of your $50,000 base salary, or $2,500, going into that account. Now you still have to pay 10 percent in income taxes, but it’s 10 percent of $47,500, which is only $4,750 instead of $5000.

The example in the next column shows what it looks like if you choose not to save anything for retirement.

The third column shows what your income and then retirement account looks like if you choose to put that 5 percent into a 401(k) Roth account.