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Neglect That Spells Retirement Ruin

"Ten times final pay gets it done," Wray said. "The issue is the 40 years. You've got to start at 25 to retire at 65."

"We definitely have a challenge," he added. "We've got to get those 20-year-olds in the plan."

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The need is likely to become more acute as companies increasingly move away from traditional pensions.

Hewitt found that while most large firms that operate these pensions don't plan to change them this year, more than a quarter -- 27 percent -- said they will consider excluding new employees in the future. Similarly, 1 in 5 companies is considering switching to a 401(k) or other "defined contribution" plan only.

This means that many of Wray's 20-year-olds will never have a traditional pension.

That may not seem like much of a loss as they read the headlines about troubled older companies trying to "dump" their traditional plans rather than continue to fund them. But at those sinking airlines, steel companies, textile mills and the like, workers can take comfort from the fact that if their pension is $45,000 or less at age 65, they will get that money, thanks to the Pension Benefit Guaranty Corp., the government organization that backs traditional plans.

Of course, many higher-paid workers, such as airline pilots, will get far less than they were promised by their companies -- but they will get something, and it will continue as long as they live.

Those who depend on 401(k)s may do very well. They may even have money left to leave to their kids.

But those who don't enroll at a young age, who withdraw their money and spend it when they change jobs, or who borrow from their accounts to pay for what seem at the time to be more pressing demands, will find the 8, 8 and 40 very difficult to achieve.

Today, about 22 percent of retirees get all of their income from Social Security, and about two-thirds get more than half. While there is little doubt that the system itself will be there for today's young workers, many of the proposals to "save" it involve reducing benefits from the levels promised by the system as it is now. Even the private accounts are not expected to prevent some reduction.

So in an era of reduced Social Security and vanishing traditional pensions, today's workers must save early and often to have any hope of a comfortable retirement. And if that means sacrifice now, then sacrifice is what workers have to do. The numbers are the numbers, and barring an economic miracle, there's no way around them.

Relief will be extended to taxpayers involved in so-called 1031, like-kind exchanges, if the parties or property involved are caught up in a presidentially declared disaster for which the Internal Revenue Service is extending other deadlines, according to a notice to be published by the IRS on Jan. 31.

Like-kind exchanges allow owners of investment property to sell one and buy another without recognizing the capital gain on the first property. However, the taxpayer must meet certain deadlines, such as identifying the new property within 45 days of selling the old one and buying it within 180 days. The IRS will now allow an additional 120 days for taxpayers affected by disasters, if they meet other criteria.

Mr. Ed's Tax Service should be shut down, the IRS told a federal court last week, arguing that the Louisiana firm has prepared thousands of false tax returns since 2000, costing the government $45 million in revenue in 2000 and 2001 alone.

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