Company Pensions Are as Passé as Gold Watches
Better start planning now to self-finance your retirement
Seek investment advice. Congress enacted a law in 2006 allowing companies that manage retirement plans like 401(k)'sto offer investment advice to employees. Fifty-four percent of workers say they are likely to take advantage of the opportunity to get advice. However, only 21 percent of the people who plan to seek advice say they will implement all the recommendations. "I ignore it," says George Tarcia, 59, of Erie, Pa., who works for an automotive supplier, about the investment advice his company offers. "They're very guarded with their advice, and it's the standard boilerplate advice that you get from any of the big companies."
Get on the Internet. Many retirement plan providers use the Web to provide information about retirement accounts or allow employees to manage their own assets. While most workers are comfortable, say, using online calculators, fewer would use the Web to shift money between investment accounts, obtain professional advice, or purchase financial products.
Calculate how much you need to retire. Only 43 percent of workers report having estimated how much money they will need to retire, EBRI says. "If you don't know what goal you're shooting at, it's going to be very difficult to end up at the right place," Van Derhei says.
Take personal responsibility. Social Security may still be viable when you retire, but you shouldn't count on it as an exclusive source of income. Some 68 percent of workers are doubtful that Social Security will continue to provide benefits of at least equal value to those given today's retirees. "Now that the retirement system has changed, you need to be more reliant on your own decisions," says Copeland, "and invest in a way that will maximize what you can get while you are working and protect your assets after you retire."