<TABLE>
<CAPTION>
PUTNAM BALANCED RETIREMENT FUND
Supplement dated April 8, 1996 to
Prospectus for class A, B and M shares dated March 1, 1996
The table in the section "Financial highlights" on pages 6 and 7 is replaced with the following:
Financial highlights
(For a share outstanding throughout the period)
For the period
March 17, 1995 February 1, 1994
(commencement (commencement of
of operations) to Year ended operations) to Year ended October 31
October 31 October 31 October 31
1995 1995 1994 1995 1994 1993 1992* 1991 1990
Class M Class B Class A
<C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $8.88 $8.67 $9.31 $8.68 $9.28 $8.50 $8.56 $7.47 $9.34
Investment operations
Net investment income .25 .38 .34 .45 .43 .45 .16 .21 .31
Net realized and unrealized
gain (loss) on investments .90 1.15 (.60) 1.17 (.49) .99 .74 1.87 (1.03)
Total from
investment operations 1.15 1.53 (.26) 1.62 (.06) 1.44 .90 2.08 (.72)
Less distributions:
From net investment income (.21) (.40) (.27) (.46) (.43) (.45) (.16) (.19) (.31)
From net realized gain on
investments -- -- (.11) -- (.11) (.21) (.80) (.75) --
In excess of net realized
gain on investment -- -- -- -- -- -- -- -- (.01)
Tax returns of capital -- -- -- -- -- -- -- (.05) (.83)
Total distributions (.21) (.40) (.38) (.46) (.54) (.66) (.96) (.99) (1.15)
Net asset value,
end of period $9.82 $9.80 $8.67 $9.84 $8.68 $9.28 $8.50 $8.56 $(7.47)
Total investment return at
net asset value (%)(a) 13.13(b)18.25 (2.75)(b) 19.32 (.61) 17.68 11.15 29.29 (8.64)
Net assets, end of period
(in thousands) $522 $10,073 $4,196 $468,725 $455,299 $551,391 $633,181 $699,858 $724,871
Ratio of expenses to average
net assets (%)(c) 1.09(b) 1.91 1.34(b) 1.15 1.08 1.02 1.11 1.09 1.03
Ratio of net investment income
to average net assets (%) 2.76(b) 4.09 3.20(b) 4.93 4.92 5.06 1.87 2.56 3.65
Portfolio turnover (%) 131.00 131.00 125.69 131.00 125.69 224.28 118.43 135.18 152.06
<PAGE>
Three months
ended
Year ended October 31 October 31 Year ended July 31
1989 1988 1987 1987 1986
Class A
Net asset value,
beginning of period $9.15 $9.05 $11.76 $11.40 $11.95
Investment operations
Net investment income .39 .23 .05 .20 .27
Net realized and unrealized
gain (loss) on investments 1.00 1.37 (2.34) 1.90 1.03
Total from
investment operations 1.39 1.60 (2.29) 2.10 1.30
Less distributions:
From net investment income (.39) (.27) (.02) (.37) (.40)
From net realized gain on
investments (.31) (.08) (.40) (1.37) (1.45)
In excess of net
realized gain
on investments (.01) -- -- -- --
Tax returns of capital (.49) (1.15) -- -- --
Total distributions (1.20) (1.50) (.42) (1.74) (1.85)
Net asset value,
end of period $9.34 $9.15 $9.05 $11.76 $11.40
Total investment return at
net asset value (%)(a) 16.30 19.81 (20.20)(b) 20.39 11.87
Net assets, end of period
(in thousands) $1,138,983 $1,391,983 $1,497,312 $1,868,298 $1,026,462
Ratio of expenses to average
net assets (%)(c) .82 .81 .19(b) .78 .82
Ratio of net investment income
to average net assets (%) 4.20 2.57 .45(b) 1.78 2.24
Portfolio turnover (%) 117.59 31.21 49.66 214.89 197.96
* During fiscal 1992, the fund expanded its investment flexibility to include corporate bonds, foreign
securities,warrants and restricted securities. Accordingly, results of operations prior to fiscal 1992, as
presented above, may not reflect those that would have been achieved under the fund's current investment policies.
(a) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) Not annualized.
(c) The ratio of expenses to average net assets for the year ended October 31, 1995 includes amounts
paid through brokerage service and expense offset arrangements. Prior period ratios exclude these
amounts.
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<PAGE>
The second paragraph under the heading "How the fund is managed" on page 19 is replaced with the following:
The following officers of Putnam Management have had primary responsibility for the day-to-day management of the fund's
portfolio since the years stated below:
Year Business experience
---- (at least 5 years)
------ --------------------
Edward P. Bousa 1992 Employed as an investment professional by Putnam Management since 1992.
Senior Vice President Prior to 1992, Mr. Bousa was a Vice President and Portfolio Manager at Fidelity
Investments.
Kenneth J. Taubes 1994 Employed as an investment professional by Putnam Management since 1991.
Senior Vice President Prior to 1991, Mr. Taubes was Senior Vice President of the Finance Division of U.S.
Trust Company.
Rosemary H. Thomsen 1995 Employed as an investment professional by Putnam Management since 1986.
Senior Vice President
Charles G. Pohl 1996 Employed as an investment professional by Putnam Management since 1983.
Senior Vice President
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