Retirement is something that people don’t really think about until it is too late. Many people do not put away enough money for their golden years and find out much later in life that they should have started sooner.

Inflation is a major factor to consider when saving for retirement. Money needs to grow at a steady rate to counterbalance the rising annual costs of inflation. Investing money can help, but care should be taken when investing money that has to be saved for retirement.

It is important for an individual to start saving for retirement as early as possible. A person who starts a pension or provident fund in their twenties will see significant growth in his/her retirement investments than a person who starts saving in their late thirties  or forties. A person who starts putting money away in a retirement portfolio later in life will have to put away a larger amount to counterbalance inflation.

It is also important to review pension or provident funds every year. Consult your financial adviser to see if the amount saved will be enough to last the number of years needed or fund contributions need to be increased every month. There is generally a ten percent increase of all provident funds, but an individual can request the annual increase be greater if so desired. This will ensure that investments will yield a higher return on maturation. Companies sometimes allow employees to buy back pensions. This is done by the employees investing a certain amount into the fund which excludes their monthly contributions.

Looking at the state of the economy and rising costs every year many people will not be able to keep up with the standard of living at retirement that they lived while economically active. This can be quite scary as people will have to save as much money as possible and diversify their portfolio to minimise risk. Entrepreneurs may never be able to retire, or will have to downscale their lifestyles if they want to keep up with their present standard of living.

There is no exact figure one can give to a person who wishes to save for retirement. All a financial adviser can do is present one with the best possible policy to suit the needs of the individual and review it every year.  Factors like inflation, the economy and stock market prices, and at what age the individual starts building up retirement funding are important when considering how much to save for retirement.