Most of you baby boomers and your faithful associates have nothing to look forward to in retirement.

For the industry's thousands of postwar baby boomers, it's no longer morning. The oldest among you have already turned 50, and the looming question is not when you will retire, but whether you can ever afford to retire.

Based on many hours of conversation with contractors through my seminars and phone contacts, I've learned that upwards of 90 percent do not have profit-sharing plans in place for retirement for themselves or their faithful associates. Here we have an industry filled with hard-working, highly skilled people protecting public health, safety and comfort, but without providing for their own old age. I think this is a human tragedy in the making.

If this trend continues, most of you will have to work well beyond the traditional retirement age of 65. Maybe for the rest of your life. In a sense one could say that you are destined to work yourself to death.

Scant Savings

According to a recent USA Today/CNN/Gallup Poll, only four in 10 Americans are saving even as much as $1,000 a year toward retirement. From what I know about the financial condition of thousands of PHC contractors and their employees, the numbers are even more depressing.

Hell, far too many can barely afford to spend $29 for my book or $150 to attend my seminar. At the same time they're constantly indebted to their "captive" wholesalers.

Yet about two-thirds of the people that I have spoken with regarding retirement state that they expect to live better lives upon retirement than they do today. B.S.! I've got news for them. It's not going to happen. Not when so many of them tell me they can't afford to raise their prices to support a retirement plan, because they'll "price themselves out of the market."

Actuarial experts tell us that when baby boomers begin to retire in 2011, they'll need about $1 million in savings to ensure an annual income of $50,000 throughout their retirement years. Generally speaking, people underestimate how long they will live and overestimate how much money they'll have.

Social Security Woes

Social Security was never meant to be the sole source of retirement income. It was always viewed as the sturdiest leg of a three-legged stool -- Social Security, pension plan and individual savings. Estimates show that most people need 75 percent of pre-retirement income to maintain their standard of living after retirement. Social Security will provide less than half that amount.

Besides, without changes the Social Security trust fund will be broke by the year 2030, just as the last of the baby boomers near retirement age. Two workers will be supporting every retiree, compared to 3.3 workers now and 40 in 1940, the first year that S.S. benefits were paid out.

My belief is that Congress will never let Social Security run out of money. I'm betting that lawmakers will keep the system solvent by raising taxes and cutting benefits. We already see the system being scaled back. The age at which people can collect full benefits is going up to 66 in 2005 and 67 in 2022. I'm also betting that Congress will ultimately raise the age to 70, being that people live longer than they used to when Social Security first came about.

Also, taxes have been levied on 85 percent of S.S. benefits paid to couples with income greater than $44,000 since 1994, and to a single person with income greater than $34,000. Before, only 50 percent of benefits were taxed.

Business Sense

As a business owner, your challenge is double. You have to plan your own future, and also consider the retirement goals of your most valuable assets -- your faithful associates. To do any less, you have not lived up to your moral responsibility as an employer.

According to The Wall Street Journal, more than 80 percent of all major corporations offer employee retirement plans, and the number of small businesses offering such plans has quadrupled since 1984. Unfortunately, this has not been the case in the PHC industry.

Offering such plans is not only a moral responsibility, it also makes good business sense for several reasons:

All company contributions to a qualified plan are made on a pretax basis. This reduces taxable income. Who would you rather contribute money to -- Uncle Sam to play around with, or your faithful associates? A 100 percent company-funded profit-sharing plan is a fantastic benefit that can help you recruit and retain good employees.

Everyone says there are no good people out there to fill the jobs we offer. Baloney. It's just that good people gravitate to the jobs that offer the best pay and benefits. Money vested in a qualified retirement plan will grow tax-deferred, allowing you to experience the 8th Wonder of the World -- compounding of interest. You don't have to save $1 million to have $1 million waiting for you upon retirement. You just have to save a fraction of it.

Choosing A Plan

It's beyond our scope here to go into depth about the various types of retirement plans available. I recommend you consult with a good combination tax attorney/CPA to investigate all of the options. However, here is at least a sketch of the types of plans available:

1. Defined Benefit Plan -- this is ideal if you want to maximize business tax deductions and invest the most you can for your own retirement. With this plan, contributions are determined by an actuary. This places the risk of investment fluctuations on you. You must pay the stated benefit even if investment performance falls short. These plans are better suited for businesses with a stable profit history and older principals.

2. Defined Contribution Plan -- provides employees a stated annual contribution from you, usually based on a percentage of compensation or profits. There are three types of these plans:

A. Profit-Sharing -- employer contributions are flexible and based upon a percentage of total compensation paid out to all employees, up to 15 percent. Because you're not required by law to make a contribution in less profitable years, profit-sharing is attractive as a first retirement plan for a new business, or for a company with a volatile profit history.

B. Money Purchase Plan -- you must contribute the same percentage of an employee's compensation each year regardless of profit performance. This provides a more secure retirement benefit, but your company should have a track record of profitability before opting for this kind of plan.

C. 401(k) Plan -- a form of profit-sharing or stock bonus plan. It lets employees contribute pretax dollars. As an employer, you are not required to contribute to the plan, but you can make matching contributions at your discretion.

3. Simplified Employee Pension Plans (SEPs) -- these are relatively new programs especially tailored for small businesses. As their name suggests, they are intended to make it as easy as possible for small employers to offer a retirement program.

'Dear Frank ...'

"This note brings more thanks than words can express ... for your kindness meant more than you could ever know. Thanks for everything, for the retirement party at the Wisconsin Club, the champagne farewell breakfast, and the checks for a cruise for Ed and me. You've made a great impact on my life and I shall never forget it. You have made it possible to enter another phase of my life with dignity (my italics). Love, Jan."

What does Jan mean by the phrase "with dignity?" Husband Ed worked in a job that never provided a retirement plan. "With dignity" means that thanks to the mid-six figure nest egg accumulated by Jan, she and Ed can actually enjoy the golden years of their lives.

This is the fate that awaits too many of you and your associates, my dear friends. Don't procrastinate any longer. Consult your CPA, tax attorney and estate planner. Have the courage to build into your selling prices the cost of a solid retirement plan. Do it now while time is still on your side.