The sooner you start saving for retirement, the better chance you have of having a comfortable old age, but statistics show that only 45 percent of workers in their 20s participate in 401(k) plans.

Some in the industry and Congress think automatic enrollment is the answer.

“Automatic enrollment dramatically improves participation by younger people,” said Lori Lucas, director of participant research at consultant Hewitt Associates in Lincolnshire, Ill.

Peter Marathas of Boston, a partner in the Mintz, Levin, Cohn, Ferris, Glovsky and Popeo law firm, said, “In the very first paycheck it sets the tone for how much you have to live on. For low- and middle-earners this is a real boon.”

The follow-up to automatic enrollment, which might begin at a mere 3 percent of compensation, is automatic annual step-up of the contribution. While Lucas hasn’t seen it happening much yet, she says the response has been positive.

Employees are much less likely to opt out of the maximum at raise time, said Lucas, who figures that most employees would go along if a third of their 3 percent raises were set aside for contributions to retirement plans.

“Never underestimate the power of immediate gratification,” she said. “The beauty of contribution escalation is all about inertia. People who do nothing at all (and many people do) can get to a robust place in their 401(k) with escalation. The same with lifestyle funds … you’ve come close to a foolproof plan.” (A lifestyle fund is a portfolio of various funds whose mix changes to adjust risk level as an investor ages.)

If your company doesn’t offer a 401(k) plan, you can get many of the same benefits by setting up what the Internal Revenue Service calls an Individual Retirement Arrangement and the rest of us call an individual retirement account, or IRA.

If you have earned income and are under age 70, you can contribute up to $4,000 – or $4,500 if you’re older than 50 – to an IRA in 2005. You usually can make a contribution for your nonworking spouse as well.

If you are covered by any sort of retirement plan at work, the amount you can contribute to an IRA is reduced if you make more than $50,000 a year ($70,000 if married and filing jointly) and drops to zero when your income hits $60,000 ($80,000 for joint returns).

The rules get more complicated when one spouse is in a plan at work and the other only has an IRA. For details, go to the IRS Web site – www.irs.gov/pub/irs-pdf/p590.pdf – or call (800) 829-3676 and ask for Publication 590.

The retirement-savings tax credit, also known as the saver’s credit, which took effect in 2002, sounds like a great way to encourage lower-income workers to start contributing to 401(k)s and IRAs.

The program allows low-income workers to take part of their retirement savings contributions directly off their tax bills as a credit, which is much more valuable than a deduction.

The problem with the law, according to Bo Harmon of the Retirement Security Project at the Brookings Institution, is that the earning limits are set so low that very few people can take advantage of the credit because they don’t owe enough in taxes.

A couple earning up to $30,000 a year and filing jointly, for example, will get a 50 percent credit on the first $2,000 they put into a retirement account in 2005. But if they make $30,100, the credit drops to 20 percent. At $32,501 it’s 10 percent, and at $50,000 it’s gone.

“If you’re at the very bottom of the scale you often have no tax liability and can’t use the credit,” Harmon said. “A little higher up the scale and the benefit disappears.”

Of the 59 million tax filers with less than $30,000 a year in household income in 2003, between 5 million and 6 million used the credit.