ANCHOR: About half of all Americans work for a company that offers a 401(k) retirement program, or another retirement savings option.

ANCHOR: Of those, just over 60 percent participate. Our money and real estate expert Ilyce Glink is here with some suggestions on how to make the most of your 401(k).

Ilyce: About 16 percent of all employees who can contribute to a 401(k) put in the maximum each year — which is the best thing you can do to ensure a financially secure retirement. The question is, what is everyone else doing? The answer is, not much. According to a Wall Street Journal survey ….

Americans Retirement Savings

26% saved less than $10,000

28% saved $10,000 – $50,000

16% saved $50,000 – $100,000

19% saved $100,000 +

11% didn’t know

ILYCE: Obviously, you want to put the maximum into the accounts that are tax-deductible and tax-deferred. That means you don’t pay taxes on the cash you put in today, and you don’t pay taxes on the earnings until you withdraw the cash. The account types that are tax-deductible and tax deferred are …

Tax-Deductible, Tax-Deferred Retirement Accounts 401(k)
403(b) and 457 plans
Keogh (for self-employed individuals)
Simplified Employee Pension (SEP) (Small business)
Savings Incentive Match Plan for Employee (SIMPLE) (small business)
IRA (anyone)

ILYCE: To make the most of these accounts, you’ll want to fund them to the max. You won’t be able to withdraw the cash until you’re 59 1/2. If you do, you’ll pay taxes at your current rate plus a penalty. You need to learn to live on less so you can fund these accounts.

If you’re an employee, you’ll want to go to your plan administrator for details on how much you can put away. If you’re self-employed, you can put in up to $30,000 per year, depending on how much you earn and what type of plan you choose. Check with your tax preparer or a CPA for details.  Remember, these are types of plans. Once you put the cash in, you’ll choose the investments — stocks, bonds, mutual funds — which will generate the return you want. For more information…

American Association for Retired Persons
www.AARP.org

Alliance for Investor Education
www.InvestorEducation.org

Consumer Information Catalog
www.pueblo.gsa.gov

Financial Websites including:
www.Quicken.com
www.CBSMarketwatch.com
www.Bloomberg.com

All major brokerage firms, like Fidelity Investments, Charles Schwab, Merrill Lynch.