Save for retirement, because it may be coming sooner than you think.

There is no question things are improving. Let's start with the Conference Board's Leading Economic Index. On a trailing six month basis, five out of 10 components are moving in a more positive direction as of the end of June. In April it was only three. In March, two. This recession will end, and maybe soon.

But what about the job market? Have we seen any improvement there? The best I can say about the job market is that some companies I work with have stopped laying people off. Many more have at least slowed the rates at which they are letting people go. Few, if any, are hiring; even to replace employees who leave on their own.

The job market, in my opinion, will be looked upon historically as the single most important factor impeding growth for this year and next. What concerns me most about this is the dampening effect it will have on the above-mentioned recovery. And the longer it takes to recover, the longer it will be until employment begins to rebound.

This morning I received an email informing me of upcoming changes to my 401(k) plan:

This message is intended to inform you of a change being made to [your] 401(k) Plan. ...

The Investment Review Committee recently evaluated the 401(k) Plan’s existing fund offerings and has decided to remove the [unnamed fund]. This fund has been under performing relative to its benchmark and similar funds for quite some time. ...

Concerned about making too much money and bumping into the limit on how much you can sock away in an employee retirement plan this year? Looking to max out your SEP IRA contributions? You've come to the right place. Listed below are the the limits to all federally sponsored employer retirement plans.

Contribution Limits
Elective deferrals for 401(k), 403(b), 457 and SAR-SEPs   $15,500
401(k), 403(b), 457 and SAR-SEP Catch-Up Contribution     $5,000
Defined Contribution Plan Limit                           $46,000
Maximum SEP IRA Contribution                              $46,000
SIMPLE IRA and SIMPLE 401(k) Contribution                 $10,500
SIMPLE IRA and SIMPLE 401(k) Catch-Up Contribution        $2,500

SEP Minimum Earnings Limit                                $500
Maximum Annual Defined Benefit Limit                      $185,000
PBGC Maximum Monthly Benefit                              $4,312.50

Maximum Includable Compensation                           $230,000
Highly Compensated Employee                               $105,000
Key Employee                                              > $150,000

OK, I know it's only October, but it's always good to be thinking ahead. This is just a quick note to remind you and me (because I always forget these things and have to go look them up again) that the 2008 IRA contribution limit is $5000 for both Traditional and Roth IRAs

If you happen to be over 50 years old, your 2008 IRA contribution limit is $6000 because you are eligible for catch-up contributions.

Speaking of catching up, you've made your $4000 IRA contribution for 2007 already, haven't you?

I got an email from a reader a few days ago. The message was in response to my article, What to Invest in Now. It had to do with asset allocation and risk management, which my article touched on briefly. The reader pointed out that his company had helped him solve the allocation vs. risk problem in the most optimal way possible. His company had just contracted with a major mutual fund company to provide access to a family of professionally managed retirement date targeted mutual funds.

Did you get that? It's a mouthful. Here's what it means. He can now put some or all of his 401-k savings into a certain type of managed account structure within his 401-k. He then tells the manager what he wants his expected retirement date to be. Within the managed account structure, his funds are then apportioned among a number of mutual funds according to some optimal asset allocation formula known only to his 401-k management company.

Do you remember the retirement investment seminar I told you I would attend last week? I went to it thinking I might learn something new. (See You are Never Too Old) As it turns out I did learn something new. I didn't learn anything new about investing, but I did learn something new about selling financial planning services.

I realized how important it is to see investing as the boring activity it is. In fact, investing really isn't much of an activity at all. Investing is mostly inactivity.

The financial planner conducting the seminar did a great job keeping the audience engaged as he went along with his presentation. There were plenty of questions from the attendees, and many of them showed the audience was listening and learning.

One question in particular had to do with keeping a long term perspective when it came to saving for retirement. Maybe it wasn't so much a question as a protest. She didn't like the idea of sitting and waiting for her nest egg to grow. She felt like she should be doing something, taking some kind of action, doing some work to make her investments grow.

Is saving 10% of your paycheck every month enough? 20%? 50%?

How much from every paycheck should you set aside for yourself? How much should you pay yourself before you pay out to anyone else?

If you set a plan for how much of your income to put away each month, and then do some math, you can project how much you'll have so many years down the road. The trick is in choosing what effective interest rate you'll get in those so many years.

But as the fine print always says:

past performance is no guarantee of future results

You can never know what interest rate you'll get on your money in the future. The corollary to this rule is, you can pick whatever rate you want to use. It doesn't matter, because it'll be wrong, but it will be as right as the next person's guess. That means whatever interest rate you use, you will be right, or as right as the next person's at least.

Well that felt (just about anything but) good, didn't it? A 311 point haircut. No question, a lot of people, myself included, are seeing a lot more red this morning than they're used to lately.

The bears are lapping it up. If you happened to be in one of the two major Exchange Traded Funds set up to cater specifically for the market bears yesterday, you did just fine. Both the Prudent Bear, BEARX, and the Grizzly Short, GRZZX, were up over 2% yesterday.

If you've been bearish recently, yesterday was a big payoff day for you. In fact, you've been feeling pretty good about your investment choices for a little while now. Looking at the chart below tells me your returns have been ahead of the S&P 500 returns for a few days now. In fact, if I had invested all my money in the Grizzly Short fund a month ago, I'd be ahead of where I am today by well about 10%.

Inflation numbers are due out today. I'll be interested to see what the press and the experts they consult with have to say about inflation. Think they'll point a finger at the Fed, and try to make it Ben's problem after all?

While we're awaiting the latest consumer price index numbers, here's an interesting topic to ponder: What sort of retirement nest egg might you need to:

• Generate enough retirement income to live at your current standard of living
• Continue to generate income at the same level, net of inflation, for as long as you live

You might not know it, but there is such an investment. One with virtually no volatility and with built-in inflation protection. This investment is at the far end of the risk scale, where risk is virtually eliminated. And as you might guess, just like anything else in this world, you pay for that privilege.

OK before I even start I want to give you a fair warning. I'm in a mood today. It's Friday. It's been a tough week. I'm tired because I didn't get to bed early enough last night and I didn't sleep well. That's all the right ingredients for a soapbox session, don't you think?

How much money do you make? How much do you want to make? Is your answer to the second question greater than your answer to the first? Sure it is. It's human nature to want more than we have. If this weren't true we'd never have bothered to come up with the free enterprise system.