Robin Rombach, Post-Gazette Joshua Hall Click photo for larger image. The Case Who: Joshua Hall, Hill District. Age: 23 Household income: $45,000 ($3,750 per month). Major monthly expenses: $900 mortgage; $200 student loan payment; $300 for gasoline; utilities. Savings: $8,000 in 401(k); $3,000 in checking. Monthly contributions to savings: $488 ($5,860 per year). Goals: Save for retirement, new car, future wedding and college fund for future children.

At 23, Hill District resident Joshua Hall already has more money set aside for retirement than some workers twice his age.

Mr. Hall, who has about $8,000 in a 401(k) plan at work, should be commended, said Diane Pearson, a certified financial planner with Legend Financial Advisors in the North Hills.

"Unfortunately, a lot of people don't find value in saving for retirement when they are at a younger age," she said.

Mr. Hall, a help desk supervisor for a major financial services firm, contributes 7 percent of his $45,000 salary to the retirement fund, while his employer kicks in 6 percent.

He says he's careful with his money so he won't have trouble paying his monthly bills.

"I shop at [deep discounter] Gabe's for clothes. I try to make a lot of meals at home," he said. "I'm pretty frugal."

Because he doesn't splurge very often, there aren't many more ways to cut back, he said. Still, he thinks he could save a couple hundred dollars more per month if he tried.

But before Mr. Hall bumps up contributions to his nest egg, Ms. Pearson thinks he should establish a better financial foundation for the near term. Here's what she recommends:

Fund an emergency reserve in a money market account or ready-access certificate of deposit. He should set aside four- to six-months worth of salary, or about $15,000 to $22,000.

"That way, he will be earning interest on the money as it grows, but in case there is a need, he can have access to these funds quickly without tax effects," Ms. Pearson said.

Buy a disability insurance policy, which, at his young age, should be relatively inexpensive. The policy should be payable to at least age 65, have a cost-of-living adjustment, define a disability based on his occupation and include residual benefits to be paid in case he is unable to earn his full salary.

Draft a will, especially since he is a homeowner, and consider financial and medical powers of attorney and a living will, which designates someone to make decisions about health care if he is unable to do so and outlines his wishes about medical treatment.

Besides planning for a comfortable retirement, Mr. Hall also wants to start saving for a new car, future wedding and college tuition for future children.

"I'm a planner," he says.

Ms. Pearson said he should make the reserve fund his top priority for now.

If he is able, he could contribute a small amount to a state-sponsored 529 college savings plan and name himself as the beneficiary, she said. That way, the funds would be available tax-free after one year if he decides to return to school. If not, the plan would continue to compound tax-deferred.

Once he has a child, he could change the beneficiary. Or if it ends up that he doesn't have children, he could remain the beneficiary and give the money as a gift to a family member or even use it himself, though in the latter case, he would have to pay a 10 percent penalty plus income taxes on his earnings.

As for retirement, Mr. Hall should consider putting up to $4,000 a year into a Roth IRA, even if it means reducing his 401(k) contributions, as long as he doesn't lose his employer match, Ms. Pearson said. A portion should be invested in a well-diversified mutual fund, she said.

A Roth IRA can serve as both a regular savings account and a retirement account since original contributions can be withdrawn tax-free and penalty-free at any time.