PUTNAM BALANCED RETIREMENT FUND
Prospectus Supplement dated August 1, 1996 to the
Class A, B and M shares
Prospectus dated March 1, 1996
The third sentence in the second paragraph under the heading "How
the fund pursues its objectives" is replaced with the following:
The fund will invest in securities rated at the time of
purchase at least B by Moody's Investors Service, Inc.
("Moody's") or by Standard & Poor's ("S&P"), or in unrated
securities which Putnam Investment Management, Inc. ("Putnam
Management") determines are of comparable quality.
The second and third paragraph and the first sentence of the
fourth paragraph under the heading "How to buy shares--Class A
shares" is replaced with the following:
There is no initial sales charge on purchases of class A
shares of $1 million or more. However, a CDSC of 1.00% or
0.50%, respectively, will be imposed on redemptions (other
than redemptions by certain participant-directed qualified
retirement plans, which are subject to a two-year CDSC of
1.00%, as described below) within the first or second year
after purchase.
There are also no initial sales charges on class A shares
purchased by participant-directed qualified retirement plans
with at least 200 eligible employees. A CDSC of 1.00% will,
however, be imposed upon the redemption of shares purchased
after July 31, 1996 at net asset value by a participant-
directed qualified retirement plan (including a plan with at
least 200 eligible employees) that initially invested less
than $20 million in Putnam funds and other investments
managed by Putnam Management or its affiliates and that
sells 90% or more of the amount initially invested within
two years after its initial purchase.
Any CDSC will be based on the lower of the shares' cost and
current net asset value. Any shares acquired by
reinvestment of distributions will be redeemed without a
CDSC.
Shares purchased by certain investors (including
participant- directed qualified retirement plans with at
least 200 eligible employees) investing $1 million or more
who have made arrangements with Putnam Mutual Funds and
whose dealer of record waived the commission as described
below are not subject to the CDSC.
2717 8/96
