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impact of inflation is factored in.

DEFINING YOUR RETIREMENT FUND STRATEGY
Putting a little money aside each month into a pension fund, or into a savings account, will start to make a difference, especially if you start this process quite early in your career.

However, there is no escaping the fact that it will be a hard slog if you remain constantly short of cash. There are therefore some other things that you should consider to enable you to step up your retirement payments.

1.Reduce your costs and any existing debt
When we're short of cash, there are two ways to remedy that situation. The first is to increase our salary and the second is to reduce costs. Reducing costs is usually easier. Get a print out of your bank statement and look at everything that you spend money on. In nearly all cases, there will be many areas where you can reduce your spending. Cost categories to look at include food, travel, and entertainment. I heard recently of someone who spends over 500 (c. $1,000) per year on mobile phone bills. You need to decide whether the money you're spending could better be spent on looking to your financial future.

2. Increase your income
Just because it's easier to reduce costs, doesn't mean that you shouldn't also look to increase your income. There are several ways you can do this. You could apply for a promotion at work, or move to another company. You could look for opportunities to work overtime. You could take on a weekend job, or write freelance articles for magazines, or write for Helium! Remember that every little bit helps and that every pound or dollar that you put into a savings account or into a pension fund will grow in value. In savings accounts, you will get interest, whilst for pensions you will be investing in shares which will put dividends into the pension pot and hopefully also produce a sizeable capital gain.

3. Move to an employer who offers a pension scheme.
There are many jobs (especially in Retail) where the employers don't offer a pension as part of the employment package. Switching to a company that does offer a pension can make a big difference. The ideal situation would be if you can find a company that offers a final salary pension scheme, although sadly these are becoming very rare.

Finally, I'd also suggest that you set up a standing order from your current/checking account. The danger is that we forget to transfer across money to our savings account or to a pension. Setting up a regular standing order will mean that you will know that money will be transferred every month. Set the amount that you can afford to pay, and choose the payment date to coincide with your pay day. Once the money's out of your account, you no longer have to resist the temptation to spend it on other things!

Taking these steps will put you on the path to having a retirement fund to fall back on. And hopefully as you progress in your career you'll be able to step up the size of payments that you make. Putting into practice a retirement plan could be the best and most important thing that you've ever done, allowing you to enjoy the comfortable retirement that you deserve.

Learn more about this author, Simon Wright.
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