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From 1946 through 1997, stocks rewarded investors with a compound average
annual return of 7.5% after inflation. But many economists believe investors
should expect smaller returns in the future--perhaps as little as 5% after
inflation. That would sharply boost the amount investors need to save for
retirement, as illustrated by these examples, prepared by 401(k) adviser
Financial Engines:



JACK, AGE 55, has $1.48 million in stocks and wants to retire in 10
years with $2 million in today's dollars. He wants a 75% probability of
hitting that goal, and he's on track if he saves 9% of his $150,000 salary
and if stocks yield 7.5% (after inflation). But if Jim believes equity
returns will be lower, he'll have to save more.



                    ------------ANNUAL SAVINGS-------------
EQUITY RETURN       PERCENTAGE OF SALARY    TODAY'S DOLLARS



   7.5%                    9%                   $13,500
   6.0                     25                    37,500
   5.0                     37                    55,500



JANET, AGE 45, has $844,550 in stocks and wants to retire in 20
years with $2 million in stocks (in today's dollars). Like Jim, she wants
a 75% probability of hitting that goal-which is a good bet if she saves 9%
of her $150,000 salary and if stocks return 7.5% after inflation. But under
a lower-return scenario, here's how much more she'll have to save:



                    ------------ANNUAL SAVINGS-------------
EQUITY RETURN       PERCENTAGE OF SALARY    TODAY'S DOLLARS



7.5%                       9%                   $13,500
6.0                        22                    33,000
5.0                        31                    46,500






Data: Financial Engines