You've graduated: Now start saving for retirement

Welcome to WalletPop's series "You've graduated. Now what?" Our bloggers have a wealth of suggestions to help you find you way through that time of amazing transformation, from student to working stiff.

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Last summer my niece Cindy graduated from college and came to visit. I told her we needed to have A TALK. She may have been bracing for some trite wisdom or an age-inappropriate tirade on birth control. Instead I hit her with something much worse. I told her the grim news: she should already be thinking about saving for retirement.

Since Cindy is a far smarter kid than I ever was, it didn't take much to convince her of the "miracle of compounding" and how much easier it is to save for retirement when you start young.

Here's an example I found just plugging numbers into an online calculator: A 21-year-old making $25,000 a year and putting away 3% of her income would end up (after adjusting for raises and a 8% stock market return) with $3.1 million at age 65--enough to live on 90% of her last salary. If she started a decade later, she'd have less than half that at $1.4.

It's staggering how much better you'll do in retirement if you start when you're young. It's also amazing that we barely teach our young graduates anything about retirement savings even though the weight of the expense falls is falling increasingly on individuals to manage. Will there be any traditional pensions around when the class of 2008 retires? Or even Social Security?