In a way, retirement planning is a bit like gardening. Like gardeners carefully planning just what to plant in which field or plot - and please, hold back on the zucchini!! - those in the earning years need to plan for a careful balance among assets for retirement.
Working people, especially those on a straight salary, are used to thinking in terms of one source of income. They may be aware of other assets; individual retirement accounts, for example, which are growing, mushroomlike, in quiet, dark little corners of their financial house. But basically they are living off one stream of income.
For retirement, on the other hand, people will have to coordinate several streams of income, plus other assets, such as their (usually paid-for) homes.
The tax and other laws governing all these seem to change almost monthly. Even if they didn't, it would still be tricky to come up with a retirement budget you can feel good about. Economists' forecasts of inflation for even a relatively short term often have all the authority of the hollowly cheerful weatherman on TV.
But don't give up hope. If you're interested in planning for your retirement - in evaluating your mix of assets, to see how they all fit together, there are lots of people with lots of ideas out there.
Here is an outline of some of the important ''crops'' you should have in your retirement garden, with some tips on what's new and noteworthy for each.
Your home: Most people go into retirement with their homes paid for, or nearly so. As Carol F. Finnegan, editor of the United Retirement Bulletin, in Boston, points out, your home provides not only a place to live but in some cases income. ''You can rent part of it out,'' she notes. Of course, this may be contingent on zoning regulations, but renting out a single room, perhaps to a student, generally poses no problem from the local authorities, she adds, ''as long as there are no cooking facilities. That seems to be the critical thing.''
Then there are of course equity-access accounts, reverse mortgages, and other ways of converting equity into income. Some of these work better than others, and ''Be careful!'' is the word from financial planners.
Dale Bizzi of State Street Bank & Trust in Boston suggests that for the very wealthy - those in the 50 percent tax bracket after retirement - just taking out an ordinary mortgage against the value of their home and reinvesting the lump sum to produce a stream of income might make sense.
If you've cleverly figured out, though, that you can make a killing by investing in tax-free instruments, the IRS is already one step ahead of you. You can deduct interest on a loan if you borrow to invest - but only if you invest in taxable instruments.
''You'll be in the same bracket for interest on the loan and for income on the investment,'' Ms. Bizzi points out. To get a rough idea whether you will make a go of this mortgage-and-invest strategy, see whether your return on your investment is higher than your mortgage rate. Also, state taxes need to be figured in.
Social security. Benefits experts love to speak of retirement programs as a ''three-legged stool,'' and social security is one of the ''legs,'' along with corporate pensions and your own savings. Social security has the advantage of being indexed to inflation.
Corporate pensions. These are another story. Many companies have made ad hoc adjustments, and you'll want to do research on your own company to find out what its practice has been. But even if the company has granted some sort of cost-of-living allowance to its pensioned employees, nonce money is hard to count on.
''It's not a cut-and-dried thing you can assume,'' says Ms. Finnegan, editor of the United Retirement Bulletin. If anything, she says, there is a trend away from indexed pensions, as companies strive to hold down employee benefits. Even companies that have made ad hoc adjustments are being careful to write their contracts ''so they aren't forced into it (making adjustments.)''
Ms. Finnegan warns people not to be put off if their employers require them to kick some of their own money into a pension fund - 1 percent of salary, for example. She adds, ''If your employer offers a contributory program with some matching, you're stupid not to take advantage of it - it's like voting yourself a raise.''
Ms. Finnegan points out an important change in the law covering rights of survivorship for pensions.
''What often used to happen was that when a woman's husband died, his pension stopped, and she had no idea that this would happen.''
Survivor benefits are calculated by dividing one pension into smaller monthly payments to make it last over the lifetimes of two people, instead of one.
Hitherto the norm has been the so-called ''straight life annuity.'' It has taken an extra bureaucratic step, a written agreement, for an employee to provide survivor benefits for his or her spouse. Now all pensions are required to have survivor benefits, and an employee wishing to trade off survivor benefits in favor of a larger monthly check needs the written consent of a spouse.
And, says Ms. Bizzi, any spouse being asked to sign such an agreement ''should think 40 times first - should get legal advice.''
John J. McFadden, acting chairman of the pension studies department of the American College in Bryn Mawr, Pa., points out another change in the law governing pensions: A pension may now be assigned as part of a divorce settlement to cover alimony, child support, or marital property rights.
Hitherto pensions have been, in theory at least, not assignable.
There was seen to be a conflict between the fiduciary responsibility of the pension fund's trustee (typically a bank or insurance company) to pay the pension only to the employee, on one hand, and the divorce decree, on the other.
In practice, however, says Mr. McFadden, ''a whole patchwork of exceptions'' developed. ''State laws have not been uniform.''
He adds, ''The significance (of the change) is greater than people realize.'' For people going into a divorce, pension rights will now be ''a standard item on the table.''
Those already divorced can go back to court for a new order assigning the pension.
Mr. McFadden also observes, ''There is more portability in pension plans than people realize.'' In the case of some newer or smaller plans, the IRS requires vesting after four years.
401(k) salary reduction plans. Having your salary reduced hardly sounds like a benefit, but these plans, along with 403(b) plans, for teachers and employees of nonprofit organizations, are catching on in a big way.
Here is how they work: A certain amount of your salary is skimmed off (''deferred''), before income tax, and invested. The gains pile up free of taxes (usually including state and local ones) until payout, when you are usually in a lower tax bracket than in prime earning years. Payout may be in either a lump sum or an annuity, and one of the decisions you may have to face is how to take your money.
''If you can get a lump-sum distribution, if that's offered - then take it,'' says Ms. Finnegan. Why? ''I prefer to control my own destiny. . . . You can take a lump sum and invest it. Even with a CD at 11 percent you'll do better'' than with an annuity, ''and you'll have your principal intact - to pass on to your heirs eventually.''
Ms. Bizzi, a lawyer and financial planner at the Boston bank, agrees ''a thousand percent'' with Ms. Finnegan's reasoning, but cautions that managing a lump sum may not be for everyone - not even for those with the means to hire professional asset management.
If you are thinking of taking a lump sum, you first need to find out whether it's possible under your pension plan. ''The little brochures they give you may not say anything about lump sums - what you should do is ask to look over the big book,'' the full pension plan, and never mind that it's likely to be the size of a metropolitan telephone book. There, somewhere in the sea of small gray print, is likely to be mention of a lump-sum option ''at the discretion of the trustees.''
Individual retirement accounts: Now that the universal IRA has been around for a while, people are seeing that the decision on the best place for an IRA is a decision that has to be made every year. The best place for this year's IRA may not be the same as the best place last year.
''When IRAs were first made universal, banks were guaranteeing 15 percent a year for five years,'' says Ms. Finnegan. ''You'd be silly not to take it. But it might not be available next year.''
There is a certain debate simmering among financial planners as to whether growth stocks or a growth-stock fund is a good IRA vehicle. Some mutual funds - notably the Freedom Fund, run by Fidelity Investments of Boston - are set up as aggressively managed growth funds for those with no current tax liabilities. The idea is that the fund's managers can move money in and out of stocks quickly, without concern for the capital-gains-tax treatment.
With the shortening (until 1988) of the holding period for capital gains to qualify as long term, ''that advantage has become less important,'' as Jane Jamieson, IRA product manager at Fidelity, acknowledges.
But beyond that, Ms. Finnegan and others point out that proceeds of an IRA, when distributed, are all taxed as ordinary income - at a higher rate, that is, than is normal for long-term capital gains. Hence, putting IRA money in a growth stock fund short-circuits the full tax advantage of the IRA; bonds or bond funds or money-market funds might make more sense.
On the other hand, Ms. Finnegan points out, ''If the growth in the stock fund is 25 percent annually, then it really doesn't matter.''
Keogh plans. ''The universe for IRAs is much larger than the universe for Keogh plans,'' says Fidelity's Ms. Jamieson. ''But the universe for Keoghs is much broader than people realize.'' Basically, anyone who is self-employed can have a Keogh plan - even if the self-employment is only part-time work done in addition to regular employment with a firm having a regular corporate pension plan.
The limit on contributions to these plans has been raised: now owner-employees of businesses, including free-lancers, can kick in 20 percent of their gross earnings, or $30,000; employees can kick in 25 percent.
Discretionary investments: In addition to all the more or less structured parts of your retirement program, you'll probably have a bundle of general savings to manage.
''A lot of people are scared to death of equities,'' Ms. Finnegan says. The memories - or the family anecdotes - of the Great Depression are still with them. On the other hand, some people scurry to their brokers without thinking things through.
She says, ''The whole thing with investing is, where do you get the best total return? You want to make up a balanced portfolio.
''People talk about capital gain as if it were the only thing. But what you want is something that pays more every year - enough to cover inflation.''
She suggests picking ''utilities that increase dividends to keep up with inflation.'' Such investments ''are not going to be 50 percent of your income, but it's a help.''
Financial planners - and brokers - consulted by the Monitor recommended a portfolio made up of from 60 to 80 percent stocks and the rest bonds, money-market funds, and other investments.
John Slatter of Prescott, Ball & Turben in Cleveland recommends buying stocks for the long haul - four or five years at least - and diversifying. ''You shouldn't have more than 10 percent of your discretionary investment money in one industry.'' You should be in at least 10 different stocks, 20 if possible.
''Don't load up on utilities,'' he warns, calling them, plus banks and oil companies, ''the three industries most often invested in for the wrong reasons.''
If investors must err, he suggests they do so on the side of ''undertrading'' rather than ''overtrading.'' One rule he suggests is, ''Sell one stock every year - probably your worst one.
There is also a lot of bullishness on bonds and bond funds. Rates are high enough that Robert Vandell, professor of business administration at the University of Virginia, says, ''Municipal bonds are attractive now if you're in the 30 percent tax bracket or more.''
Usually an investor has to be in a higher bracket for these lower-yield but tax-free investments to be a good deal.
William O. H. Freund Jr., also of Prescott, Ball & Turben, notes that the ''yield gap'' between stocks and bonds is ''historically high - 8 percent in favor of bonds.''
State Street's Dale Bizzi points out that bond funds can be appropriate for small investor, but have drawbacks for those who can construct a bond portfolio. ''With a bond fund, there's no maturity. With a single issue, a $10,000 bond, let's say, if interest rates go up and the price goes down, to $9,000, say, you can take a loss and sell - as you might want to do.
''Or you can wait it out and redeem it for face value at maturity. Or you can do a bond swap. In a bond fund, those buy-and-sell decisions are being made for you.''