Retirement Plan

The ball is about to drop on 2008. Is your retirement plan where it should be? Whether you're 20 and starting to save or already managing a sizable nest egg, next year could be an important one for your long-term money. There'll be an election of a new president, who could try to change taxes or Social Security policy. Blink, and you might find your employer shuffling you into a new savings plan. Retirement experts offered some advice for navigating the coming year: Get going. You have until April 15 to make your 2007 individual retirement account contribution (up to $4,000, or $5,000 if you're 50 and up)

After 38 years of working in Anne Arundel County schools, retirement will not end the education of Peter Zimmer. The longtime principal of Crofton Woods Elementary School, known for his creative methods for bringing international culture into classrooms, his encouragement of teachers' growth and his love of travel, intends to jet around the world on what he calls "a make-believe sabbatical." Maybe he'll fly to London, or perhaps see his brother in Thailand. He'll definitely visit Santa Barbara, Calif.

WASHINGTON -- More than 1 of every 3 workers at retirement age in the 2050s will have nothing saved in a 401(k)-style account, according to a government study released yesterday. On average, workers born in 1990 will save enough to replace about 22 percent of pre-retirement income, or $18,784 per year in 2007 dollars, according to the Government Accounting Office. "Today's workers will more likely struggle to make ends meet during retirement than previous generations," said Democratic Rep. George Miller of California, who had requested the report.

Work for a big company - or, better yet, one of those perennial best-workplace contest winners - and you're loaded up with benefits, right? Not necessarily. Soaring health costs and a shift away from guaranteed pensions have taken their toll. For example, just a third of companies with 200 or more workers offer retiree health benefits, according to a 2006-2007 survey by the Kaiser Family Foundation and Health Research and Educational Trust. Among this year's winners of AARP's Best Employers for Workers Over 50 awards, 31 of the 50 companies on the list offer retiree health benefits.

When Elliot Levine changed jobs six years ago, he had to figure out what to do with the $10,000 he had accumulated in his 401(k). Rolling it into an individual retirement account made the most sense for the Oceanside, N.J., resident because he didn't want to be limited to the handful of mutual funds in either his former or his new employer's plan. In an IRA, he could put the money wherever he chose. "I wanted to get control of it," said Levine, 37, a marketing executive who invests most of his IRA in individual stocks.

Inflexibility can be deadly to a portfolio. Setting up a retirement income plan based on a single age of death - whether it is average life expectancy or some other number - is one of the biggest mistakes savers make. It's also quite common. The myriad retirement planning calculators available through advisers and the Internet offer sophisticated simulation technologies that run portfolios through thousands of market scenarios, providing investors with a confidence level that their money will last until a specific age. But what if you live longer than that?

For decades one statistic has barely budged: About half of American employees don't have a retirement plan at work. That means the retirement of tens of millions of people may be largely financed by Social Security unless they have set aside savings on their own or inherit a windfall. Now there's proposed legislation in Congress aimed at reducing that number by requiring employers that don't offer a 401(k) or any other retirement plan to do more. Under the legislation, such employers with more than 10 workers must give employees the opportunity to make payroll deductions into an individual retirement account.

With so many workers failing to manage the do-it-yourself 401(k) retirement plan, employers increasingly are becoming more hands on. Some automatically enroll employees instead of waiting for them to sign up. Many supply workers with advice or have added no-fuss funds to take the guesswork out of investing. Others offer retiring workers the option of buying an annuity with 401(k) money so they have an income stream for life, as with a traditional pension. Indeed, as things are headed, the 401(k)

WASHINGTON -- Workers saving for retirement often are hobbled by a lack of clear information on their investments and the fees they are charged to manage them. These fees can eat away tens of thousands of dollars over time. Now, amid mounting evidence that murky accounting could undermine the financial security of retirees, federal regulators are seeking to toughen disclosure rules and devise a single standard for a wide variety of investments and retirement plans. Saying current disclosures often are "missing the mark by a country mile," Securities and Exchange Commission Chairman Christopher Cox said his agency will advocate new rules that would force mutual funds, insurance companies and others to more clearly detail the cost and performance of investment funds and retirement plans.

Companies are recruiting former workers back into the fold, another reason to think about your retirement benefits as you walk out, or back in, the door. Kirsten DaSilva, 35, spent the first eight years of her career as an auditor with accounting giant PricewaterhouseCoopers in Florham Park, N.J. She jumped ship for an opportunity to join a company that was going public, but the company later was acquired, and DaSilva wasn't happy in the new regime. So, last fall she went job hunting, on familiar turf.