They say life begins at 40. But saving for retirement should have started long before that - if you believe all those retirement planning books and articles. It's advice many people ignore. What if you're now in your 40s and you haven't even started?

The good news is you don't have to panic. But you do have to get serious about it - and you will face some tough choices. Making up for lost time could mean really cutting back on your current spending. If you don't start saving until your 40s, you'll need to set aside 20% of your gross income. If you wait until your 50s, your target will have to be 30%. As a last resort, you may have to sell your house, your cottage and your second car; get a second job; and reduce your leisure spending.

Like I said, though, don't panic. The U.S. Government, as part of President Bush's last tax package, made an allowance for 50-somethings who needed to play "catch-up" with their retirement savings to invest more of their money into their 401(k)'s IRA's. Normally, the IRS cap such annual contributions. But Uncle Sam has removed those caps for those Johnny-Come-Latelies who need to grow a lot of money -- and quick.

If you find yourself in a catch-up situation, you'll likely need to take more risk. That doesn't mean putting all your money into penny stocks. But it does mean having a greater percentage of your investments in higher-earning equities rather than the more cautious Treasury and savings bonds that many people select as they get older.

Consider these examples:

If you start investing $100 a month at age 25 into a retirement account that gains 10 percent a year, by age 65 you'll have $632,000. But if you don't start investing the same amount until you're 35, you'll only take away $226,000 when you retire. Starting at 25 will get you $406,000 more, at a cost of only $12,000.

If you set aside $200 a month at a 10.2 percent return, you could start investing at age 21 and stop 10 years later and have a $1 million nest egg at age 65. That means a $22,000 investment over one decade gets you $1 million down the road. Of course, assuming continued inflation, $1 million then won't buy you what $1 million would today. But it'll buy you a heck of a lot more than nothing will.

The Rule of 72

Here's a trick some financial planners use. To find out how many years it will take your investment to double, divide the annual rate of return by 72. So at a 7 percent return, your money will double in 10 years and quadruple in 20 years. Financial gurus call it "the rule of 72."

The benefits of investing early in life are obvious. But to make it work, you also need to invest regularly. Saving at scheduled intervals in regular amounts has become easier, in part due to defined-contribution retirement options such as the IRA's and 401(k) plans I mentioned above. These are good start-up investments because money is automatically deducted from your paycheck and contributions are often matched by your employer.