Given the current economic climate on the international market coupled with the state of affairs of the Jamaican market it now becomes extremely difficult to plan for future expenditure moreover retirement.

The events on the international market have a domino effect on our little island. The upsurge in oil prices, grain prices, the debacle in the US mortgage market along with our own problems of an ever-increasing inflation rate have placed a tremendous pressure on consumers. It now takes a concerted effort, discipline and a devoted advisor to save towards retirement.

Retirement planning is by no means a new phenomenon however, it's becoming an even more difficult task. Retirement means different things to different people. Some look forward to pursuing new interests, while others just want time to relax.

Whatever the future holds, one thing is certain - a secure retirement requires careful planning. Taking some time to envision how you'd like to spend your time when you retire will help ensure that you enjoy your later years. After you have established your general retirement goals, it's imperative that preparations are in place to live comfortably in those golden years.

The first order of business is to make consistent savings a part of your daily lives. This is easier said than done but sure enough it makes sense. Learn to pay yourself first; savings should be your priority so don't leave it for last after everything else has been attended to. If you are fortunate enough to receive unexpected cash then it's wise to put most, if not all, of it into savings even as you make your regular contribution. This only helps you to reach your goals faster.

Through the creation of a standing order regular savings can also be achieved. A standing order is where money is transferred from one account to another designated account. When the monies accumulate to a substantial amount then the funds can be transferred into higher interest options such as repurchase agreements, money market accounts, treasury bills, bonds etc. It is at this point that a financial advisor will be needed to help determine what investment vehicle to acquire. You may find that once you save frequently your reserve builds up quickly and you will feel motivated to save more. The hardest part is to start so start now!

There are indeed specific schemes that are geared towards pension planning. However, with the rate of inflation skyrocketing out of control it's best to take a closer look at other investment products. Project your retirement expenses based on your needs, not rules of thumb. Be honest about how you want to live in retirement and how much it will cost.

Then calculate how much you must save to supplement your other income. Securities that offer principal protection, exposure to foreign currencies, stock market and mutual funds are just a few examples to closely examine. A good advisor will ensure that the investment chosen fits not only the clients' goal but also their time horizon. As a case in point, textbook theories have always stated that younger clients (23 - 35 yrs) should invest more heavily in equities as opposed to bonds and as you grow older the reverse should be observed. This tends to be true as the stock market is really for the long haul as short-term returns tend to be volatile (the same is true with mutual funds, though to a lesser extent). By no means is this theory discouraging the older clients from the stock market; it's just that caution should be taken to the weighting of certain asset classes in the retirement portfolio.

In the hands of a good investment consultant other investment options can also be explored and a well-diversified portfolio built with the direct view of living comfortably in retirement. As investors we need to be very clear about our goals, our risk tolerance and our time horizon so that our advisors can effectively help to build our portfolios. Any changes along the way should be communicated as soon as possible. Retirement planning is a never-ending tussle but it's a battle we all need to conquer.

Dian Blackwood is a personal financial planner with Sterling Asset Management Limited. Sterling provides medium to long term financial advice and instruments in US and other world market currencies to the corporate, individual and institutional investor. Feedback: If you wish to have Sterling address your investment questions in upcoming articles, e-mail us at: info@sterlingasset.net.jm

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