NEW YORK (Money) -- QUESTION: I'm 32 and earn $50,000 a year. I don't have much money in savings nor do I have a 401(k) plan. I do have an IRA with about $9,000 in it, however, and I plan to contribute more when I have extra cash on hand. Can you give me some advice on what I should be doing so I can live comfortably when I retire? -- Davis, New York

Let me get right to the heart of the matter. You say that you plan to contribute more to your IRA when you "have extra cash on hand." Sorry, but that's not much of a game plan.

Truth is, very few of us ever have what we would consider "extra" cash. There's always something to buy, like say a new computer system we can't do without or the latest IMAX size LCD TV-home-theater extravaganza.

Here's a better way to think about it. Put your savings plan on automatic pilot. By this, I mean you should set up some sort of a system where money automatically goes into savings and investment accounts on a regular basis, preferably monthly.

By adopting an automatic approach, saving becomes much like any other obligation you have, like making a mortgage payment or paying for utilities. Which makes sense. After all, at its most fundamental level, building a nest egg is nothing more than setting aside some of what you earn today so that it will be there during retirement. In other words, you're paying today for you retirement tomorrow.

So what's the best way to adopt this automatic pilot plan that I think has a much greater chance of leading to a secure retirement?

Well, the most convenient way for many workers is to contribute to a 401(k) plan. Ideally, you want to contribute the max, but certainly you should do at least enough to take full advantage of any matching contribution your employer offers. This way, your money goes directly from your paycheck to your 401(k) before you can touch it.

You also get a tax benefit in that the money you put into your 401(k) - as well as the earnings on that money - isn't taxed until you withdraw it. That's a definite plus.

But even more important is the convenience. And since your paycheck is net of your savings, you learn to live on your salary after you've put money away for retirement. So you're living below your means, which is something that many people in this country can't seem to get the hang of.

What if your company doesn't offer a 401(k). Not to worry. Enroll in an automatic investing plan at any number of major mutual fund or brokerage firms.

The idea is simple: you open an account and agree to have a specified amount of money transferred each month from your checking account into the mutual fund. Some funds let you launch an automatic investing plan with as little as 50 bucks. In other cases, you might have to meet a minimum initial investment requirement, which can vary from $500 to $3,000 or so. Once you've done that, however, the money moves from your checking account to your mutual fund account like clockwork, without you having to do a thing.

(One caveat: don't confuse the automatic investing I'm advocating with "systematic" investment plans, aka "periodic" or "contractual" plans, which charge big fees. See why systematic plans are usually a lousy deal.)

You can open one account for your IRA and then, if you want to really increase your chances of achieving retirement security, open another account for whatever you can save beyond your annual IRA contribution (which maxes out at $4,000 this year, plus another $1,000 for people 50 and older).

By the way, in addition to making saving more convenient (and more likely to actually occur), automatic investing has another advantage: discipline. By investing month after month regardless of whether the market is headed up or down, you eliminate the trap that so many investors fall into - namely, trying to time their investing so they get in just before the market soars.

People who try to engage in this sort of timing often end up plowing all their money in at a bad time or end up being paralyzed by indecision and not investing it at all. Better to just keep shoveling it in a little at a time. This way, you buy at a variety of prices, reducing the risk that you'll invest it all just as the market is ready to tank.

For the names of some mutual funds you might consider for starting your plan, I suggest you check out the Money 65, Money Magazine's elite list of recommended funds.

One last thing: as your paycheck grows, it's a good idea to boost the amount you invest as well. This way, your savings will keep pace with your expanding income, increasing the odds that you'll be able to retire without having to seriously ratchet back your lifestyle.

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