SUPPLEMENT TO THE STATEMENT OF ADDITIONAL INFORMATION
DATED MARCH 1, 1998 FOR THE LORD ABBETT AFFILIATED
FUND, INC.
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SUPPLEMENT EFFECTIVE DATE: APRIL 27, 1998
Uncle Sam
Wants You!
[Graphic omitted]
To Get a College Degree
New legislation allows you to invest in a
tax-favored way for college.
Lord Abbett
Education IRA
[Logo]
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Making the Grade
When deciding how to pay for college, you should take advantage of new tax
incentives. A financial strategy, tailored to your goals and resources, can help
you achieve the education dreams of your
children and grandchildren.
To give you an idea of just how expensive education costs have become...
[Graphic omitted]
Twenty years ago, a four-year degree at a private college cost, on average,
about $11,000.(1)
Today, that same degree carries an average price tag of about $50,000 an
increase of over 350%.(1)
The above figures can be daunting. However, with recent legislation, the cost of
a college education may not be out of reach for most families. The Education IRA
allows you to invest up to $500 annually towards a child's education - money
that will grow tax deferred and that can be distributed, tax free, to pay for
qualified higher education costs.
How Does the Education IRA Work?
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(1) $500 maximum current annual contribution until the beneficiary turns 18.
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(2) Contributions are not tax deductible; earnings grow tax deferred.
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(3) Distributions for higher education costs are tax free.
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(4) Qualified education costs include: tuition, fees, books, equipment and
basic room and board.
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(5) Beneficiary must use money by age 30; any remaining balance not used for
education expenses must be distributed at age 30 and earnings will be
included in income and subject to a 10% penalty fee.
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(6) To avoid income and penalty taxes, you may roll any remaining account
balance to the Education IRA of another family member.
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Destination:
College
[Graphic omitted]
EARNING A COLLEGE DEGREE TAKES DISCIPLINE - AND SO DOES PAYING FOR ONE.
LET UNCLE SAM HELP FOOT THE BILL!
Every family's financial situation is unique. Your investment professional can
help structure an investment plan that will let your tax savings help pay for
your child's education. With the Education IRA, your investment grows tax
deferred and qualified distributions are tax free, giving your child an extra
push down the road to a college education.
Assume the Education IRA had been available in 1980. If you had made a $500
annual investment in an Education IRA invested in Lord Abbett Affiliated Fund,
how would the account have fared over an 18-year period? As the graph to the
right illustrates, an Education IRA may make college expenses a little easier to
handle.
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Average Annual Total Returns:
Average annual rates of return for Lord Abbett Affiliated Fund, assuming the
Class A share 5.75% maximum sales charge as required by the SEC, for the periods
ended 3/31/98 were:*
1 year: 26.80% 10 years: 15.62%
5 years: 18.19% 20 years: 16.34%
* Past performance is no indication of future results. The investment return
and principal value of an investment in the Fund will fluctuate so that
shares, on any given day or when redeemed, may be worth more or less than
their original cost.
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An Education IRA with Affiliated Fund
$500 Annual Investment: 1/1/80 - 12/31/97(2)
[Line chart omitted]
If the Education IRA had been available in 1980, your $500 per year,
a $9,000 total investment, would have helped with a large portion of
college costs had you funded it with the Affiliated Fund.*
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Who is Eligible for the Education IRA?
CONTRIBUTIONS CAN BE MADE BY:
Single tax filers with adjusted gross income (AGI) up to $95,000 and
couples filing jointly with incomes up to $150,000 (phasing out for AGI up
to $110,000 and $160,000, respectively)
Parents, grandparents, godparents or any other individual who meets the
income limits
BENEFICIARIES MUST BE:
Under the age of 18 to receive contributions
Age 29 or younger to make withdrawals for higher education expenses
LORD ABBETT AFFILIATED FUND
has helped thousands of investors pursue their financial objectives since its
inception in 1934. The Fund is designed to provide long-term growth of capital
and income. Affiliated Fund's shareholders have owned the Fund, on average, for
over 18 years, a fact of which we are quite proud.(4)
See footnotes on back panel.
<PAGE>
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(1) Average undergraduate tuition and fees for private four-year colleges.
Source: The College Board.
(2) Assumes annual $500 investments made on January 1, and the reinvestment of
all distributions. All investments were made at the applicable Class A
share 5.75% sales charge for account values up to $50,000.
(3) Tax-free status of withdrawals assumes student is under the age of 30 and
funds are used for eligible education costs.
(4) Based on a survey of Lord Abbett Affiliated Fund shareholders conducted by
Lord Abbett in 1993.
Bonds purchased by the Fund are subject to market fluctuations upward and
downward inversely to the rise and fall of interest rates. Common stocks are
also subject to market fluctuations, providing the potential for gains and the
risk of loss.
The Fund issues additional classes of shares with distinct pricing options. For
a full discussion of the differences in pricing alternatives, please see your
investment professional or call Lord Abbett Distributor LLC at 800-874-3733 and
ask for the Fund's current prospectus. A prospectus contains more complete
information about the Fund, including charges and expenses, and should be read
carefully before investing. If used after 6/30/98, this literature must be
accompanied by Lord Abbett's Performance Quarterly for the most recently
completed calendar quarter.
For more information about the Lord Abbett Education IRA or an application,
please see your investment professional or call Lord Abbett Distributor LLC at
800-874-3733.
[Logo](R) LORD, ABBETT & CO
Investment Management
A Tradition of Performance Through Disciplined Investing
LORD ABBETT DISTRIBUTOR LLC
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The GM Building o 767 Fifth Avenue o New York, NY 10153-0203 o 800-426-1130
