All this complaining and joking about how terrible retirement plans are doesn't address the real retirement savings issue. Americans are responsible for funding their retirement and it is difficult. The economic downturn of the last two years caused investment losses both inside and outside of 401(k) plans. The long-term impact on retirement plan losses compounds multiple other retirement savings problems.

Missing Out On Savings
Working people with the opportunity to save in retirement accounts, don't. The average participation rate for voluntary employee salary deferral plans is about 50%. Remember, saving something is better than nothing. (Your contributions could soon become automatic and mandatory. To find out more, read Voluntary 401(k) Contributions: A Thing Of The Past?)

Employer sponsored 401(k) plans are still viable methods of accumulating a retirement nest egg. Take advantage of the tax-deferred savings and contribute to your plan. If your company doesn't have a plan, open an IRA.

No Goal, No Good
Investors have no idea how much they need to save for retirement. The annual Retirement Confidence Survey by the Employee Benefit Research Institute found 44% of respondents have attempted to calculate how much they will need to save for retirement. Another 44% say they just guess. If you don't have a goal you have no idea whether or not your plan is succeeding.

Online retirement calculators estimate the amount needed for retirement based on individual circumstances. Use these tools to create a realistic view of the amount you need to save.

Plan And Be Proactive
Retirement planning is complicated. Considerations include inflation, taxes and compounding, along with alternative sources of retirement income. Economic abnormalities like a recession make it more difficult for investors to make decisions. (If a dip in the economy has you worried about retirement, you still have options. Read Net Worth Nosedive: Can You Still Retire?)

The good news is that information is available to help you recover. Retirement savers must stay informed about the economy and the investments they own. Don't ignore your account statement. Proactively manage your investments.

Be Reasonable
Contrary to popular belief, investments earmarked for "retirement" are not immune to downward movement of the stock market. People who need more assurance about their retirement income may consider annuities. Government and non-profit organizations have offered workers annuity-based retirement plans for years.

An annuity is an insurance policy that behaves like an old-fashioned pension plan. It accumulates over time and produces retirement income until death. Annuities are more expensive but the trade-off is guaranteed income vs. running out of money. Individuals can contribute to annuities in addition to other retirement plans.

Consolidate Old Retirement Plans
People change jobs often. Some former employees forget about their 401(k) or they cash it out, causing a tax bill. Consolidate all those old retirement plans either to your current employer's plan (if allowed), or to an IRA. This gives you control over all of your retirement resources and you can continue to contribute to them.

Risky Business
The single most important retirement planning consideration is the least understood - risk. Investors have learned the hard way that if returns sound too good to be true, they are. But, if you invest too conservatively, you'll never reach your goal.

The optimum mix of risk vs. reward is unique to each person. You and your co-worker may be the same age with the same salary and still have different risk tolerance levels. Use risk tolerance evaluation tools to determine your own risk level and construct your retirement portfolio accordingly.

You can retire comfortably as long as you invest, stay informed, proactive and vigilant with your retirement savings. (Defend your retirement savings from the ravages of a bear market Bear Spray For Your 401(k).)

Related Articles
  1. Retirement

    How Much Should You Have In Your 401(k) To Retire?

    Determining how much money should be in your 401(k) when you retire depends on several variables, many of which are uncertain.
  2. Investing

    How To Make Sure Your Healthcare Costs Do Not Ruin Your Retirement

    The best proactive plan of action for a stable retirement is to understand medical costs, plan ahead, invest properly, and consider supplemental insurance.
  3. Investing Basics

    The Top 4 Income Investments for Retirees in 2016

    These four investment types should mitigate risk in 2016 for retirees seeking income.
  4. Investing

    3 Small Steps to Maximize Your Investing Goals

    Instead of starting the New Year with ambitious resolutions, why not taking smaller manageable steps that can have a real impact.
  5. Investing

    7 Creative Ways to Save for an Early Retirement

    Take note of these out of the box steps you can take towards securing yourself an earlier, more comfortable retirement.
  6. Your Clients

    Tips for Making Your Nest Egg Last Longer

    If you’re trying to figure out how to make your hard-earned nest egg last, there’s one piece of advice that stands above the rest.
  7. Personal Wealth & Private Banking

    What People Hate About Financial Advisors

    Advisors need to make a living too, but doing so by cutting corners at a client's expense isn't right. Here are the top complaints against advisors.
  8. Products and Investments

    SRI Funds and Your 401(k): What You Need to Know

    Socially responsible, green and impact investing options are now DoL-approved for 401(k) plans. Here's what investors should know.
  9. Retirement

    When to Fire Your Advisor and Go Robo-Advisor

    Human financial advisor or robo-advisor: Which suits your needs best? Here are some general tips to help guide you to the right professional.
  10. Retirement

    How You Actually Get Your Pension After Retirement

    No matter what type of pension plan you have at work, decisions have to be made when you retire. Here are your options.
RELATED FAQS
  1. Am I losing the right to collect spousal Social Security benefits before I collect ...

    The short answer is yes, if you haven't reached age 62 by December 31, 2015. The Bipartisan Budget Act of 2015 disrupted ... Read Full Answer >>
  2. Where else can I save for retirement after I max out my Roth IRA?

    With uncertainty about the sustainability of Social Security benefits for future retirees, a lot of responsibility for saving ... Read Full Answer >>
  3. Will quitting your job hurt your 401(k)?

    Quitting a job doesn't have to impact a 401(k) balance negatively. In fact, it may actually help in the long run. When leaving ... Read Full Answer >>
  4. Can a 401(k) be taken in bankruptcy?

    The two most common types of bankruptcy available to consumers are Chapter 7 and Chapter 13. Whether you file a Chapter 7 ... Read Full Answer >>
  5. When can catch-up contributions start?

    Most qualified retirement plans such as 401(k), 403(b) and SIMPLE 401(k) plans, as well as individual retirement accounts ... Read Full Answer >>
  6. Who can make catch-up contributions?

    Most common retirement plans such as 401(k) and 403(b) plans, as well as individual retirement accounts (IRAs) allow you ... Read Full Answer >>
Trading Center