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 will need 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.

START YOUNG

If you can. A look at the performance of a $2,000 annual retirement plan investment.  Assume a 30 year old contributing $2,000 annually to a tax deferred retirement account.

Age------------------------Balance

40--------------------------$27,943

50--------------------------$77,985

65-------------------------$236,242

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.

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.

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.

How to find out more:

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

Besides these government agencies, many private organizations may be helpful. For additional information, you may want to contact one of the following groups: