Too many people are taking their retirement planning for granted.

As a nation, we are not saving enough, and we are not informed enough about the true magnitude of the savings challenge that precedes retirement.

How much retirement capital would you need to provide a small, $1,000 per month supplement to your other retirement income? Assume a modest 4% rate of return, don't invade your principal, and leave taxes out of the picture. To get that $1,000 each month you'll need to accumulate $300,000, on these assumptions.

Saving for retirement may seem daunting when the financial markets are so volatile. But the job has to be done, and the best approach is to start early and take small steps:

When retirement is ten years off

A lot happens in ten years. There will be at least two presidential elections. Financial markets, always unpredictable in the short term, will typically change directions several times in the course of a decade. Predicting what life will be like in ten years is hazardous. (Just remember what was happening in the world in 1997.)

But those who won't retire for ten years still have time on their side. Capital accumulation should be the number one priority, and every tax-advantaged savings opportunity should be seized. Ten years out from retirement an investment portfolio is normally biased toward growth, but the process of shifting to more conservative investments begins.

Other issues to keep in mind, ten years from retirement:

Is disability insurance adequate?

Has the homeowner's insurance coverage kept up with property changes?

If debt hasn't been eliminated, it's time to start a disciplined program of payoffs, starting with those debts that have the highest interest rates (typically credit card debt).

Looking ahead five years

The best way to develop a realistic budget for the retirement years is to begin tracking your expenses carefully when retirement is five years off. Some expenses will fall when the career ends-commuting and business clothing, for example-but others may rise. A budget provides a benchmark for measuring progress and setting expectations.

The savings program five years out must be as aggressive as possible, but the investing program typically becomes more conservative. Still, even as safer investments build, it is important to remember that inflation is not likely to stay tame during the course of a long retirement. Some exposure to growth will often be appropriate.

Will you be relocating during retirement? Five years before retirement is not too soon to come to grips with this question, to begin looking for your new quarters. Has your home appreciated substantially in value? Keep in mind that the first $250,000 of capital gain from selling your home is completely tax free-$500,000 for married couples. That can be an important addition to your capital base.

The transition year

The final year before retirement can be a stressful one. Will your financial resources really be adequate to provide financial independence? Only you can test your comfort with the decision.

The final year is also a good time to review your will and any powers of attorney that you have executed. Beneficiary designations should also be inventoried and reviewed-for life insurance, IRAs and other retirement plans.

You don't have to plan alone

People do need help with their investment and financial management issues as they approach retirement, and during their retirement. The steps needed to pursue your financial goals are not easy to take, but they become easier when you have professional guidance. When you have questions, we have answers.

Jeff McKay may be contacted at 206-973-4488 or by e-mail at jeff.mckay@ingfp.com Proud Sponsor of the McKay Wealth Management Barney Clark Golf Classic supporting the Highline Medical Center Foundation.

This piece, prepared by The Merrill Anderson Company, is designed to provide accurate and authoritative information on the subjects covered. It is not, however, intended to provide specific legal, tax or other professional advice. For specific professional assistance, the services of an appropriate professional should be sought.

Securities and Investment Advisory Services offered through: ING Financial Partners, Inc. Member SIPC. Mckay Wealth Management and Pacific Rim Financial Group, Inc. are not subsidiaries of nor controlled by ING Financial Partners. 6000 Southcenter Blvd, Ste. 70, Tukwila, WA