STRICTLY BUSINESS: RETIREMENT PLANNING: GROW RICH S-L-O-W-L-Y

"Grow Rich Slowly."

Whether you're reading the book by that name, or talking with one of its authors, you realize that you're not getting any younger and that it's almost never too late to think about retirement planning.

"We don't get any younger," said Don Underwood during a recent visit to Cape Girardeau to address a seminar conducted by Merrill Lynch investment company. "At some point, be it a year or 20, people are going to have to start seriously thinking about what life is going to be like at retirement."

Underwood, a vice president in Merrill Lynch's retirement plans and services department 27 years before his retirement, joined with Paul A. Brown to author "Grow Rich Slowly -- The Merrill Lynch Guide to Retirement Planning," a 1993, 521-page book published by Viking Penguin.

Underwood, who lives in Westchester County, N.Y,, continues his association with the brokerage firm in a consulting capacity. He is also a former associate editor of Life magazine in New York City. Before that, he owned his own weekly newspaper in Tulsa, Okla.

Brown, the co-author of the book, is a senior editor at Financial World, and a former writer and editor at Inc., Business Week and Forbes. He currently lives in Holmdel, N.J. He is co-author of a second book, "Customers for Life."

Most of Underwood's time at Merrill Lynch was in the area of retirement planning. He was accompanied to Cape Girardeau by William Clark, another retired Merrill Lynch executive who now operates Clark Communications at Linden, N.J.

A believer in saving

"I'm a believer in saving, whether you're a baby boomer (ages 33 to 50), or whether you're facing retirement five years from now," said Underwood in a Missourian interview last week."

Underwood started his son on the savings route early.

"I made a deal with him when he finished college and landed his first job at age 21," said Underwood. "I kicked in the money for a $2,000 IRA, with the understanding that he would add $2,000 each year after that."

It was tough, added Underwood. "His entry-level salary was modest, but somehow, he dug up his $2,000 that next year and has been doing it since."

Underwood recommends the "4-S" System of saving. (1) save more (2) save systematically (3) save tax advantaged and (4) save smarter.

"You make up your savings shortfall by putting money into a tax advantage plan every month," said Underwood. "This can be any IRA, a Keogh, a 401k or other tax advantage plans."

Let your company help, added Underwood. The 401k plan is unparalleled in the history of long-term savings programs in America. The plan, available only through employers, features a deferred tax plan, and in many cases, the employer matches a percentage of your 401k contribution.

Underwood encourages workers to "go to the max" on 401k.

"But it's not enough to save," pointed out Underwood. "It's equally essential to invest wisely. If you're earning four percent on an investment now, can you earn six percent, or maybe eight or 10 percent."

Underwood presents an example. "Say you put in $2,000 a year, starting at age 30. At age 60, your investment is valued at $158,116 at six percent. At eight percent, the numbers grow to $226,566, and 10 percent, they could be at $329,988."

Work force aging in America

Today's work force is aging.

In two decades, the largest American generation in history -- the "baby boomers" (76 million strong) -- will start on retirement years.

"These are people now ranging from 33 to 50," said Underwood. "This generation's saving habits and preparedness for retirement will have a profound effect on the national economy for years to come."

Too many people in today's society seem to have the feeling of "live for today," said Underwood. "I stress saving early."

Life expectancy has increased during this century, from 47 in 1900 to 78 in 1990. As baby boomers reach age 65, their life expectancy may reach the mid- to late-80s.

"By 2030, there will be more older persons than younger persons in the country," said Underwood. People younger than 18 will account for 18 percent of our population. Those older that 65 will be 22 percent.

Too many Americans are more afraid of outliving their retirement resources than they are of age. The health care costs of Americans older than 65 currently account for 37 percent of total health care.

"The decline of the national savings rate -- from nine percent in the 1970s to under four percent now -- comes at precisely the wrong time," said Underwood.

People save for a number of reasons but retirement is the No. 1 savings goal of most Americans, followed by sense of security for family and children.

Although the majority of Americans now borrow money to pay for children's college educations, many of them indicated they would prefer to save in advance to cover the expenses.

Not surprisingly, some baby boomers and most "tweeners" (50 to 65) cite retirement as a savings goal while young boomers and "busters" (23 to 33) listed sense of security, college and major purchases such as home or car as primary savings goals.

There's still a lot of uncertainty concerning retirement income.

This uncertainty can be expressed in a good news/bad news adage, claims Underwood.

"The good news is: We're living longer.

The bad news is: "We're living longer."

It's easy to see the problem, said Underwood. "People are not only living longer, they're retiring earlier. As a result, a lot of people will spend as much time retired as they did working. When that happens, it's easer to outlive your money."