Help Employees Become More Savvy and Diligent Investors--Set up 401k's

The Transamerica Center for Retirement Studies found in a survey of 3600 employees that those who participate in a 401[k] plan start saving earlier, are more actively engaged in the savings process, have a better understanding of investing fundamentals and are less dependent on Social Security compared on nonparticipants. Workers are more likely to have 401k access if they work for a large company and work full-time. Men are slightly more likely to have 401k access compared to women.

Given the present state of the economy and the potential for future inflation, workers counting on Social Security to provide the primary source of retirement income take a sizable risk. If your employer is too small to offer a 401k, you might want to look into a savings club or other "forced" savings approach--do NOT use extra tax withholding as your strategy, the investment return on an increased tax refund is 0.