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Even the best-laid retirement savings plans can go awry

What if your retirement plans don't work out? None of us can predict the future. Health problems, stock market losses, inflation and soaring drug costs are just a few of the things that can derail retirement plans.

Does that make planning a waste of time?

I thought about that recently when I received a letter from a 73-year-old retired teacher who said she had to return to work because she and her husband couldn't live on their retirement income. She was bitter because Social Security reduced her benefits from $252 to less than $100 a month based on her government pension.

"You need to be aware that even the best-laid plans for retirement do not always suffice," she said. "We had money in mutual funds and we put all available cash into our home and thought we were ready for retirement. However, we could not foresee the factors that affected us."

She has a point. Sometimes planning creates a sense of false confidence, especially when the plans are based on very optimistic assumptions, such as double-digit investment returns and low expenses. In real life, there is a lot that can go wrong.

Yet I still think it is a good idea to plan for the future the best we can. The retiree who wrote me is certainly better off as a result of her efforts to save even though they did not produce the financial security she hoped to achieve.

Some keys to good planning are obtaining the most accurate and up-to-date information at each step of the way, using realistic estimates for living expenses and using conservative projections of investment returns and inflation. Then there has to be a generous margin for error.

As the retiree who wrote me discovered, Social Security benefits may be reduced or eliminated for people who receive a pension from a government job that was not covered by Social Security. The law on this changed late in her teaching career, but before she retired. If she had received accurate information from Social Security, perhaps she could have delayed her retirement. If she had built a bigger margin for error into her plans, perhaps the loss of $150 to $200 a month in income would not have forced her back to work.

And, of course the younger you are when you retire, the bigger your margin for error needs to be. You have more years for the unexpected to occur and for any mistaken assumptions to compound.

Once you have a plan, it isn't something that can be put on a shelf and forgotten. It has to be revisited and adjusted on a regular basis, even after you're already retired.

Q. If a company is delisted from trading, is there a government agency where it would need to report, other than the IRS?

Even if it has been delisted, a public company is required to file reports with the Securities and Exchange Commission. If the company you are trying to find is not doing that, consider it a bad sign.

Sometimes companies in this situation file for bankruptcy and reorganize, a process in which the original shareholders usually are wiped out. Sometimes they sell whatever assets they have, leaving a dormant corporate shell. If you are a shareholder, hope that the company merely changed its name, owns more than it owes and is still operating.

Q. I recently inherited a good amount of municipal bonds, Treasury bills and Treasury bonds. I have no experience investing and I am afraid that my financial adviser is taking advantage of my lack of knowledge. Can you recommend any courses or places to contact to learn about investing for newcomers?

I highly recommend the public library. If you don't have one nearby, head for a bookstore. Many books have been written for investment beginners. Reading the first chapter should tell you whether the book is at the right level for you. The Internet is also chock full of investment education resources. Go to a search engine such as www.google.com and type in "investment education" for some links.

Start by learning about the bonds and bills you own. Then read about risk and diversification. You may want to broaden your investments to include stock mutual funds. Whether that's a good idea will depend on your age, investment goals and tolerance for risk.

Investment education also may be available in your community through adult education classes sponsored by colleges, schools or community centers.

_ Helen Huntley writes about investing and markets for the Times. If you have a question about investments or personal finance, send it to On Money. We'll try to answer those we think are of greatest reader interest. All questions must be submitted in writing, but readers' names will not be published. Send questions to Helen Huntley, Times, P.O. Box 1121, St. Petersburg, FL 33731.

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