Currently about 50% of American workers have employers that offer some form of retirement plan, whether it be a 403(b) plan, a 401(k) plan, the thrift savings plan or even a Roth 401(k), but there’s still a significant percentage of people that don’t have any form of employer sponsored retirement plans.

Employers that do offer a 401(k) plan often mandate that their employees make contributions at some level. Often employers will also provide a match and increase your overall level of contributions. Although these techniques can be a bit heavy handed, they do force consumers to be disciplined and save for retirement when they otherwise may not have.

There’s a potential danger with 401(k) plans. Often employees have their 401(k) plans tied up in their employer’s stock, which leaves the employee’s ability to retire at the mercy of the success of the company that he or she works at. There are also employers that automatically put their employee’s retirement savings by default into ultra-safe holdings which won’t keep pace with inflation over time. Employers will often take a conservative approach to avoid being litigated against for choosing investments that are too risky if the employer’s investment choices don’t pan out.

If you find yourself working for an employer that doesn’t offer a 40(k) plan or if you are self employed, you have to plan for your retirement on your own. Self employer individuals have options to set themselves up on a simplified employee pension (SEP) retirement plan. Almost everyone can set themselves up with an IRA or a Roth IRA. Typically most investment advisors will suggest that investors choose the Roth IRA option because it allows for decades of tax free growth.

There are many mutual fund providers that offer Roth IRA retirement accounts and can be opened for as little as a few hundred dollars. Some of these companies include Vanguard, Fidelity and T Rowe Price. Charles Schwab even offers an option where one can open up a Roth IRA for just $100.00

The day of the pension plan where your employer simply takes care of you when you retire is over. You’re responsible for your own retirement and making sure you can spend your golden years in comfort.

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• Converting Your 401(k) to a Roth IRA
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