TOP 10 WAYS TO PREPARE FOR RETIREMENT

1. Know your retirement needs.

Retirement is expensive. Experts estimate that you'll need about 70% of your pre-retirement income-lower earners, 90% or more - to maintain your standard of living when you stop working. Understand your financial future.

2. Find out about your Social Security benefits.

Social Security pays the average retiree about 40% of pre-retirement earnings. Call the Social Security Administration at 1-800-772-1213 for a free Personal Earnings and Benefit Estimate Statement (PEBES).

3. Learn about your employer's pension or profit sharing plan.

If your employer offers a plan, check to see what your benefit is worth. Most employers will provide an individual benefit statement if you request one. Before you change jobs, find out what will happen to your pension. Learn what benefits you may have from previous employment. Find out if you will be entitled to benefits from your spouse's plan. For a free booklet on private pensions, call the U.S. Department of Labor at 1-800-998-7542.

4. Contribute to a tax-sheltered savings plan.

If your employer offers a tax sheltered savings plan, such as a 401(k), sign up and contribute all you can. Your taxes will be lower, your company may kick in more, and automatic deductions make it easy. Over time, deferral of taxes and compounding of interest make a big difference in the amount of money you will accumulate.

5. Ask your employer to start a plan.

If your employer doesn't offer a retirement plan, suggest that he/she start one. Simplified plans can be set up by certain employers. For information on simplified employee pensions, order Internal Revenue Service Publication 590 by calling 1-800-829-3676.

6. Put money into a Individual Retirement Account.

You can put $2,000 a year into an Individual Retirement Account (IRA) and delay paying taxes on investment earnings until retirement age. If you don't have a retirement plan (or are in a plan and earn less than a certain amount), you can also take a tax deduction for your IRA contributions. IRS Publication 590 contains information about IRAs.

IT'S NEVER TOO LATE TO START

Start young. A look at the performance of $2,000 retirement plan investments over time at 4% shows the value of starting early.

AGE----------------1995 Dollars grow to

30---------------------------$2,000

40--------------------------$24,012

50--------------------------$59,556

60-------------------------$112,170

7. Don't touch your savings.

Don't dip into your retirement savings. You'll lose principal and interest, and you may lose tax benefits. If you change jobs, roll over your savings directly into an IRA or your new employer's retirement plan.

8. Start now, set goals, and stick to them.

Start early. The sooner you start saving, the more time your money has to grow. Put time on your side. Make retirement saving a high priority. Devise a plan, stick to it, and set goals for yourself. Remember, it's never too late to start. Start saving now, whatever your age.

9. Consider basic investment principles.

How you save can be as important as how much you save. Inflation and the type of investments you make play important roles in how much you'll have saved at retirement. Know how your pension or savings plan is invested. Financial security and knowledge go hand in hand.

10. Ask questions.

These tips should point you in the right direction, but you'll need more information. Talk to your employer, your bank, your union, or a financial advisor. Ask questions and make sure the answers make sense to you. Get practical advice and act now.

401k Tip---

According to Southern California-based (401k) Enginuity (www.401kenginuity.com), twenty-year veteran in developing and running 401(k) administration and 401(k) software and recordkeeping systems, the Internet will be the primary delivery system for 401(k)s by 2007. Many web-based 401(k) plans will run on administration and recordkeeping platforms that plan providers will outsource to 401k specialists and 401k Application Service Providers (ASP).

The advantages of web-based online 401(k) plans are obvious to today's workers, and include use conveniences, real-time monitoring and reporting, and instant re-allocation of their retirement assets. The internet has also dramatically reduce the cost of 401(k) plan administration, saving plan sponsor 50% or more in ongoing fees and costs when compared to the older traditional labor-intensive plans. Outsourcing of 401(k) functions by plan providers will extend the trend towards lower cost, high-quality 401(k) products.

401(k) plan providers of all types, financial institutions including banks, insurance companies, brokerages, mutual fund companies, credit unions, and third-party administrators, are now actively outsourcing 401(k) administration and recordkeeping tasks to 401(k) ASPs --- vendors such as 401k Enginuity, whose sole function is to maintain, updated and supervise software-based 401(k) administration and recordkeeping systems on behalf of plan providers. 401(k) ASP vendors are responsible for all routine day-to-day 401(k) recordkeeping and administration functions, thus allowing the plan providers to reduce internal staff, eliminate the expense and complications of licensing, housing and running hardware and 401(k) administration software in-house. Plan providers can refocus and concentrate their efforts on to the needs of their plan sponsors and plan participants, and rely upon the outsourced ASP 401(k) vendor for the recordkeeping and technical "backbone" supporting providers' Internet-based plans. It is inevitable that some of this 401(k) outsourcing to ASPs will include secondary outsourcing of certain non-critical low-level routine day-to-day tasks to non-US locations, where labor costs are less yet the expertise is abundant.

FACTS

Financial security doesn't just happen, it takes planning, and commitment, and yes, money.

FACT-Less than half of Americans have put aside money specifically for retirement.

You can't retire with security unless you really prepare for it. That means facing up to reality, and beginning to take action for tomorrow as well as today.

FACT-In 1993, of those who had 401(k) coverage available, one-third didn't participate.

Putting away money for retirement is like giving yourself a raise. It's money that gives you freedom when you want it-and deserve it.

FACT-The average American spends 18 years in retirement.

Today, half of Americans guess when determining their retirement needs. Don't be one of them. Find out more. Save now and beat the retirement clock.

INFORMATIVE NON-PROFIT PUBLIC WEBSITES CONTAINING CURRENT USEFUL INFORMATION ABOUT 401K PLANS: 401k qualified investments for small businesses and 401k retirement planning for small 401k plans at www.self-serve-401k.com . Small 401k retirement savings plans for small businesses and selecting a pension plan or 401k for a small business at www.low-cost-investing-advice.com . Small business 401k news and small 401k plan fraud prevention news and articles at www.videoclipdownload.com . Founded in 1982, the Pension Trade Association [California Domestic Nonprofit Corporation #C1629080] is dedicated to helping workers save for their retirement through expanded coverage of 401k -type defined contribution pension plans www.pension-trade-association.org . 401k plan information at www.advisors401konline.com . Information about small 401k plans at www.payroll-401k.com

How to find out more

Here are sources of information to help you prepare for retirement:

Pension and Welfare Benefits Administration U.S. Department of Labor http://www.dol.gov/dol/pwba/

Savings Bond Operations Office U.S. Department of the Treasury http://www.publicdebt.treas.gov/sav/sav.htm

Social Security Administration http://www.ssa.gov