Sit back, relax and think about where you would like to be when you are sixty five. Spend five long minutes pondering the joy of retirement. Joy? Wake up. There is nothing joyful about growing old. It is hard, often lonely and painful.

Old people have only one reliable friend - money. The more you have, the easier life will be. So, now ask yourself this much more important question - how much wealth will you have accumulated for retirement?

Oh, so you are depending on the capital gains from your house. Think that one through for a moment. Lots of other people are doing the same thing. So when you are trying to cash in those sweet capital gains, many people will be dumping their house onto the market. Housing is a very unlikely retirement fund. Besides, you will have to live somewhere. Moreover, moving house as an elderly person sounds way too stressful.

Are you saving? No? So how are you going to live once you stop working? Social security, you say. Again, far too many people are depending on that clapped out retirement plan. Social security is going broke; everyone knows this and so do you. In ten years time, it will be gone.

So what is the answer? The 20-60-20 rule. It is very simple; you should be spending no more than 20 percent of your income on housing costs, 60 percent should be used for current non-housing expenditure, and 20 percent should be saved. And no, that 20 percent is not your estimate of the capital gain on your house. It is net income, put aside every month and placed into a savings account.

If you save for long enough, you might, just might have enough put away to make the grim reality of old age a litte more palatable.

Remember - 20-60-20.