The problem with money is that it doesn’t grow like weeds in an abandoned field. If you keep it idle in a bank at zero to minimal interest, you will be disappointed to find out years later that it has lost its value.

Inflation is our real enemy. If the cost of goods and services increases by 5 per cent every year, a fixed amount of savings held in a non-interest bearing account will likely buy only half as many goods after several years. More precisely, your Dh100,000 will be worth a dismal Dh50,000 in real terms at the end of 14 years.

If you were a janitor, you can mop floors for 40 years and by the time you’re old and unable to work, you will have a retirement pot that’s worth a lot less than your previous salary, because by then your savings will have been eroded by inflation.

It’s not enough that you save money. You need to invest it wisely to ensure you retire comfortably and you have enough funds to maintain your lifestyle: you’re still able to afford to go on vacation, play golf on weekends, buy gifts for your grandchildren or pay your doctor during retirement.

Unfortunately, it seems that a lot of people in the UAE are heading towards an uncertain future. A global study by HSBC showed that nearly half (46 per cent) of residents are not even saving for retirement.

The high cost of living in the country, as well as other pressing needs, is considered a huge hindrance to saving. Many people are delaying saving because they believe retirement is “too far away to worry about.”

They think that even if they start saving only at a later age, they will still be able to maintain the same standard of living they currently enjoy. In comparison, residents in the UK and US start saving as early as in their mid-twenties.

HSBC’s findings show that UAE residents have high expectations from their cash balances, with more than half of them (57 per cent) expecting cash savings to see them through old age.

If the situation remains unaddressed, experts say there is a ticking “time bomb” waiting to explode, citing that a huge number of residents are likely to experience “reduced standard of living in later life.”

The lack of retirement savings is an age-old problem in the UAE, especially for working expatriates. Non-UAE nationals are not just excluded from mandatory pension, more pressing financial commitments keep them preoccupied.

Many are too busy subsidizing dependent families back home, while they struggle to keep up with the rising cost of living in the country. Besides, the majority of the people who come to the country for work are only transient in nature. They work for, say, five to 10 years and move back home or elsewhere after having saved enough.

Whatever financial situation you are currently in, it’s for your own good if you make saving and investing for retirement a priority. But the question is, how much do you need to save? Unfortunately, there is no single answer for everyone.

The amount you need to save and invest depends on a host of factors such as your age, lifestyle and where you intend to retire, among others. One of the rules of thumb to keep in mind, though, is that the earlier you start, the less you have to set aside.

According to consumer champion Which?, a 30-year-old woman who wants a retirement income of £10,000 (a little over Dh55,000), needs to save at least Dh952 each month.

A 40-year-old will have to put away Dh1,815, while a woman who starts saving at 50 will need to set aside Dh4,153. The total pension amount will be reached assuming the money is invested at a growth rate of 4.5 per cent a year.

Below are some general guidelines from Which? to help you plan:

10 years to go before retirement

• Calculate how much monthly allowance you need to live on when you retire.

• If you’re contributing to your state pension back home, check how much money you will get by retirement.

• Work out whether your state pension will provide you enough income, or if there is a shortfall. If there is a shortfall, start saving.

• Consult a financial adviser how or where to put your money.

Five years until retirement

• You might need to transfer your money in the stock market and pension schemes to safer grounds, in case there are last-minute falls.

• Get another forecast on your government pension.

• Repay any outstanding debts.

• Consider writing a will.

• Resolve to increase your retirement savings.