Some 1 in 5 Americans treat their retirement account like a savings account to draw on at will. Certain 401(k) plans even offer a debit card option for you to borrow against your future. Not a good idea!

When you take a loan against your 401(k), you must pay back a pre-tax account with after-tax dollars. And then when you retire, the money is taxed again! So you're setting yourself up to be taxed twice on the same dollar.

But the big cost here is an opportunity one. If the money's not there, it has no chance to grow and multiply over the years.

Some people just accept they won't be able to ever retire. That's a choice and there's nothing wrong with it. But most people want to be able to retire at some point and have leisure time. Borrowing against your retirement plan is a sure way to sabotage your future.

Clark loves the Chilean approach to saving for retirement. The citizens of that country have personal mandatory accounts where 10% of their money is automatically taken each pay period and placed into a retirement account.

Remember, Social Security is really just an IOU from the government -- one that is unlikely to pan out for those in their 30s. Speaking of younger folks, when you change jobs, don't cash out your 401(k) and spend it. Roll it over to your new employer's plan!

Are you afraid to open your own mail for fear of seeing your 401(k) statement? Clark recently spoke to one man who referred to his plan as a 301(j) because it keeps going the wrong way!

The Financial Times of London reports that every mutual fund company is seeing people pull money out with all the market volatility. American Funds saw a 7% decline in assets during the last 90 days, while Vanguard has seen a 4% decline.

Why is this happening? People fear a loss twice as much as they enjoy a gain. It's part of being human. We're backwards creatures; when stocks roar along, people pour money into them. So we're always paying too much on the way up and getting too little on the way down.

No one can time the market. Rather, it's time in the market that matters. Clark has 3 rules of thumb to help you maximize your money over the years.


Avoid these 3 gotchas and you'll have more money over time. Just don't try to figure out when to sell and when to buy. Keep buying every month through your 401(k) or other retirement plan.

Time in is more important than timing. People are always asking Clark, "Is it time yet to get back in the market?" His standard reply is, "I never got out."

Many employers match what employees contribute to a 401(k) plan up to a certain limit. Well, Clark extended the same offer to his teen daughter about 4 years ago. He calls it "the daddy match" and he puts a dollar into her Roth account for every dollar of her pay she saves.

It's no secret that getting a teen to start saving early will help insure their financial security later in life. Clark loves pointing to a chart that shows a teen who starts saving at 15 and puts aside $2,000 for 7 years will have more than $1 million at 65. That's assuming a return on investment of about 8%, of course. Money has a strong ally in time. Most financial models show that your money doubles in value every 9 years.

Syndicated financial writer Umberto Cruz recently crunched the numbers and found that a 20 year old who puts $2,000 in a Roth for 10 years will have just under $500K at retirement time. And that's with never having to save again! If you wait until you're 30 and save at the same rate, you'll only have $370K at 65. So the message is clear: The earlier you start saving, the better off you'll be.

The same thinking applies to your car purchase. The Wall Street Journal reports that if you buy a Toyota Camry instead of a BMW and invest the money you saved, you'll have about $26K after 10 years. Do it all over again 10 years later and you'll have about $100K in 20 years. This is proof that an isolated decision today can make a huge difference down the road.

Do you have money to invest, but you're not sure where to put it? Most people who are unsure about investments hire someone to help. One of the greatest danger points is in mid-career, when you find yourself with a great deal of money in a 401K. At that time you're at the greatest risk, because that's when you're most likely to end up hiring a commissioned salesperson. Is that a problem in itself? No. There are plenty of situations when paying a commission is just fine. But in the investment world, there can be inherent conflict of interest with commissions. There are plenty of investment products that may not be the best choice for you, but you may be sold on them because the commissions are humongous. Variable and Index Annuities are referred to as 'sold', not 'bought', since people don't buy these on their own -- they are convinced to do so. Salespeople use code words such as Retirement Secured Account and other phony phrases to keep from tipping you off that you're being sold an annuity. Sometimes a Life, or Immediate Annuity makes sense, but the commissions are so low you won't hear much about them.

Clark wants to warn you away from another term: "fee-based planners." These salespeople start with a fixed fee, but the commissions on products they may sell you defray those initial costs, which again, may not be in your best interest. Honest commissioned salespeople will rise above their personal interests and sell what's right for you.

The stakes are so high in investing that Clark urges you to consider fee-only planners. They'll give you a fixed price up front for their services, regardless of the product they recommend. You won't have to worry about conflict of interest. Their success will depend on your good word of mouth and how well they did by you. To find a good one, go to the National Association of Personal Financial Advisers website, NAPFA.org. Another good resource is Garrett Planning Network: garrettplanningnetwork.com

CLARKONOMICS: Have you heard about the new documentary I.O.U.S.A.? Don't expect this flick to be a Hollywood blockbuster or to sell millions of tickets. In fact, Clark jokes that it's a true sleeper hit -- emphasis on sleeper!

I.O.U.S.A. is the brainchild of Warren Buffett, Pete Peterson and other wealthy folks. As the title suggests, it focuses on how we as a nation have wracked up debts that we can't pay.

This film describes in nauseating detail how we as a country can't afford the Social Security, Medicare and Medicaid that we've promised our citizens. The math simply isn't going to work, especially as we live longer life-spans.

The takeaway for you is that you are the only who can provide for your retirement -- particularly if you're under 40. So you can either start saving money now, or face the fact that you may not get to retire. Not retiring is not the worst thing in the world; retirement itself is a relatively new concept in human history.

If you can save as little as a dime on every dollar you make, you'll put yourself in good stead for retirement. Do you have an employer match through your 401(k)? Make sure you're putting in at least enough to pick up the match.

Members of Generation X don't think they'll ever be able to stop working, according to a survey from the BetterInvesting organization. Most adults age 27-42 have saved minimally at best for their retirement. In fact, 40% have saved almost nothing at all! Here's the upside: Gen X is not in denial about the dwindling of Social Security. They know they should be saving for retirement -- they just haven't done it. Well, the first step to getting better is to admit that you're ill!

If you don't save, you'll probably have to continue working until you drop. That's so unlike the scenario that faced most baby boomers -- a generation that really lived it up in the golden years. But at the current rate, Gen X won't even have the option of retirement. It goes without saying that Clark wants Gen X to reduce debt and save along the way.

It all begins by buying only the things that you can afford on a day-to-day basis. That's means no 0% in-store financing. We're at a unique juncture in American history where we have the permission to borrow ourselves into oblivion. But that's a choice. And if you make it, you may have to work your whole lifetime and never stop.

Clark is very impressed with young people who open a 401(k) when they first start a job. Years ago, few people even knew what a 401(k) was!

But a new study from Fidelity reveals that just under half of all 20somethings and 30somethings cash out their 401(k) accounts when they change jobs.

That's like snatching defeat from the jaws of victory.

As regular listeners know, retirement savings need time to grow. That idea is well illustrated in Clark's retirement chart.

Know that the money you cash out of your 401(k) gets hit with penalties of about 40%. So Clark's special challenge to younger people is for them not to cash out. Instead, think about rolling your money over to your new employer's 401(k) plan.

RIP-OFF ALERT: If you've spent a lifetime working for one employer and built up a sizeable nest egg, you don't want to be targeted by a 401(k) predator.

401(k) predators are those stock brokers or insurance companies that promise great wealth if you move your 401(k) from your ex-employer over to them.

Business Week recently did an investigation into the lives of those who made the transfer. In most cases, their life savings were destroyed.

One stock broker got $320,000 from a retired factory worker and reduced it to $57,000. The broker did so by running the money through bad investments with giant commissions. The factory worker had to come out of retirement and work as a school janitor for $9/hour to avoid impoverishment.

This is an extreme example, but so many people like this are profiled in Business Week. Clark was recently speaking to a man who took his retirement savings to a broker he knew socially. The result? An 80 percent loss of his money.

There are many fine, reliable, honest and decent people in the brokerage industry. The problem is that brokers don't have "fiduciary duty" to you. That means they're not required to put your interests first. Instead, they're allowed to put you in high-commission investments that are generally "suitable" for you and get away with it.

The Business Week report also shows that those free lunch and dinner seminars where they push trashy annuities are terrible rip-offs.

If you need some investment advice, Clark prefers that you seek out a fee-only financial planner. They don't earn any commission from steering you to a certain product. You simply pay them for their advice.

So often, Clark gives general "one size fits all" advice about your retirement savings. But FinancialEngines.com can be used to analyze your specific situation. This website takes a very granular look at your retirement plan. Using Monte Carlo simulation, it generates a worst case, best case and intermediate case scenario for your money down the road.

Meanwhile, FinancialEngines.com recently surveyed 1 million people to get a better idea of how we're planning for retirement. Unfortunately, 70% of us have our money fouled up in a 401(k) plan with too little or too much risk.

In addition, some 40% of us have huge money tied up in employer stock. Clark says that should be more like zero percent! But people trust the company they work for and take the path of least resistance when making investment decisions. The downside is there's great risk having all your eggs in one basket. If you think not investing in your company stock is disloyal, throw them 10% at the most and call it a day.

Diversification is the key. You have to spread your money out to lower your risk. A lot of people make the mistake of taking all their money and putting it into a stable fund or a guaranteed fund. Those options may sound like a sure thing, but they basically tread water.

Clark prefers that you have money in the Total Stock Market Index, where you own pieces of thousands of companies. Sure, it's not as "sexy" as putting it all into a single company and letting it ride. But investments should be about long-term security, not the dazzle factor.

401(k) plans are in reverse right now. No, Clark's not talking about that massive decline in your quarterly statement. That's simply the give and take of stock investments. Hopefully you're continuing to contribute to your plan. That will soften the blow by allowing you to buy more shares at a lower price.

The reversal Clark's talking about has to do with people trying to put out fires by turning to their 401(k) accounts as piggybanks. Merrill Lynch reports a 23% increase in 401(k) withdrawals year over year. Great-West Retirement Services, meanwhile, has seen a 20% rise in hardship withdrawals when people are facing foreclosure.

People often ask Clark if it's wise to avert foreclosure by dipping into their retirement savings. He usually recommends against this action. As strange as it sounds, sometimes the best option is foreclosure. Think about it: If you wipe out your 401(k) to avert foreclosure and then 6 months later you face it again, well, you haven't really solved the problem. You've just made things worse. You've cleaned out your retirement savings and you'll owe massive taxes and penalties of about 40% when you do next year's taxes. And you may not be able to avoid foreclosure a second time. So then you'll have no home, no retirement savings and you'll owe a great deal of taxes.

Clark's advice is slightly different if you're just getting back on your feet after a layoff or a medical issue. A 401(k) loan may make the most sense if you'll again be able to service the mortgage comfortably in the near future. But if you're barely keeping your head above water, a hardship withdrawal makes no sense. So if you're trying to catch up on an adjustable-rate mortgage; if you face a ballooning balance because of an option payment loan; or if you bought at market peak, you might be better off letting the home go. Finally, don't ever let a medical bill collector intimidate you into doing a hardship withdrawal. A 401(k) is not a piggybank to be raided; it's there to fund your retirement.

The latest market developments have left a lot of question marks. People who have money invested are worried; people with 401(k) investments want to know if they should do a U-turn; and people with no money invested at all want to know if any of this should mean something to them.

If you're under the age of 50, the fact that stocks are really stinking it up actually benefits you. You can buy more stock with the same amount of money you put in every paycheck via your 401(k) or IRA. You may want to invest a part of your money internationally. The truth is that there will be stronger economic growth overseas than here in the United States in the coming years. That's going to be especially true of developing countries throughout Asia; to a lesser degree in former Communist Europe; and possibly in South America and Africa. We here in the United States have 4% of the world's population, yet more than a third of the wealth. So we'll continue to be a very rich country. It is important to be an owner in capitalism. You can be an owner through mutual funds and index funds available via your 401(k) or IRA. Right now, things may be tough for you and your retirement/investment strategy. But over time, ownership is a sure way to create wealth for you and your family.

Are you in it for today? No, you're in for the long haul. Take a look at Clark's investment guide for pointers. The simplest approach to investing may be a targeted retirement fund. Clark also likes Fidelity's 4-in-1 fund. The key is to spread your money out and continue to contribute to your retirement savings through the tough times. When it comes time to read your 401(k) quarterly statement, you may want to get some generic antacid -- you sure won't be able to afford the name-brand stuff!

The majority of people don't have a penny invested, though. So should any of this matter to them? Well, we as a country and individuals have been borrowing money we don't have. That means the economy is slowing down. President Bush hopes we're not in a recession, but really we're in a consumer recession. We're all in this together and we'll all get out together. There may be some pain, even if you didn't have a penny invested. But there's also great opportunity for the 30% of us who are in good financial stead at this time. The other 70% of us will have to tighten our belts, which is something politicians don't want you to do -- at least not before the November elections. On the other side of the ledger, you have active traders who got burned in hedge funds. Clark's advice is to stay away from doing trades with leverage, which is a fancy term for borrowed money. All you want to lose is what you put in, not 100 times what you put in. So only put in what you can afford to lose and still sleep at night. Be safe and smart, and don't play it too cute.

Clark often promises to help you avoid getting ripped off. But what happens when you rip yourself off? Clark is very upset about a report he read on TheStreet.com talking about employers offering 401(k) debit cards! Employers don't like the paperwork hassle of employees taking loans against their 401(k), but this type of debit card offers a way around the paperwork. 401(k) debit cards have been around for about 5 years and they're gaining in popularity. Clark wants you to know that they're a horrible idea. People are being told it's such a great deal to borrow from yourself -- because you pay yourself back instead of a bank. But this is a fallacy. Here's why: Money in a 401(k) is pre-tax dollars, while you have to use after-tax dollars to pay yourself back. So you might pay $1.50 in real money to pay back $1 to your 401(k).

But wait, it gets worse. If you lose your job, the money is due back in the plan right away. If you can't pay back the loan, you trigger a huge tax burden and penalty because the borrowed money is treated as a premature distribution from your 401(k). You'll incur around 40 percent tax and penalty. So say you borrowed $10K from your 401(k). You will now owe the IRS around $4K you may not have because of your job loss. There are some desperate situations where borrowing against your 401(k) may work, but Clark says you must exhaust all other possibilities first. The feds should have never approved this 401(k) debit card. Clark believes 401(k) contributions should be mandatory and withdrawals should be banned.

Note: Clark is broadcasting remotely for his Christmas Kids 2007 initiative. You can donate online.

While Clark's helping you play Santa for needy children, a new report suggests that we aren't playing Santa to ourselves and our own retirement needs. People left to their own devices don't save. Or they may begin a 401(k) and then spend the money when they switch jobs. If you are younger than 45, Social Security won't be able to help you in a meaningful way. Meanwhile, there are very few pension plans around anymore. So you are your only line of defense! Many employers now have mandatory enrollment in their 401(k) plans, but the amount they deduct may be so small that it won't help in the long run. Clark's executive producer Christa began saving a mere 2 percent of her salary when she was 22. Then at one point when she changed jobs and got a higher salary, she made the leap to saving a whopping 15 percent! Her advice is to start saving now, don't wait for tomorrow. One of the most disturbing findings of the new study shows that people in their 20s have a real problem saving. That's scary considering that your 20s should be one of the easiest times to save. Most people don't yet have a family or other heavy financial obligations at that point. The sad reality is that if you don't save for retirement, you'll have to work until you die or you're physically unable to work anymore.

Do you want a free pass to financial trouble? Try being among the more than 50 percent of Americans who does not have a will! In a surprising twist, Forbes recently revealed that 1 in 3 wealthy Americans doesn't have a will either. What's going on, people? Clark wants to guilt everyone into having a will. Did you know that if you have minor children and don't have a will, the state can take your kids away at the time of your death and decide who gets them? They could go to a stranger or a relative who can't get their life together. Likewise, the state can decide who gets your money if you die and don't have a will. It could go to a family member you don't like, while your spouse may only get 10 cents on the dollar.

If you made a will years ago, you may need to dust it off and update it. You can do this yourself if your financial situation isn't too complicated. You can also go to a site like LegalZoom.com or try the highly respected WillMaker software. But you should go to a specialist if you have substantial money to protect. Retirement savings really need close attention. The beneficiary designation on your 401(k) or IRA accounts will trump whatever you have in your will. So check those designations carefully! One final note: California may be the exception to the rule that living trusts are not useful and should be avoided. That's because the Golden State has a very corrupt probate system. Some lawyers have even been able to arrange guaranteed revenue for themselves as a percentage out of someone's estate. If you own real estate in California and live elsewhere, you may want to hold it in a trust to avoid these corrupt probate courts.

Did you know that half of all American families haven't saved for retirement? Of those who have, 25 percent have stockpiled living expenses for one year of retirement. The problem is that we have not adjusted to the changes in retirement savings since Social Security is weakening and employer-provided pensions are going away. The average Social Security benefit is $11,000/year. Very few people can live on that alone. So the bulk of retirement savings has got to come from you. Over the last year, employers gained the right to automatically enroll you in a 401(k) plan and even step up your contributions every year. Laura Tyson, the former chairwoman of the Council of Economic Advisers, recently wrote in a Wall Street Journal editorial that someone forced by their employer into a 401(k) plan will save an additional $200,000 to spend in retirement. Meanwhile, 75 million adults work for companies with no retirement plan at all. Of those millions, only one in 10 saves for retirement. But Clark thinks we need to move away from depending on the government to provide for our retirement. Congress is planning to make small employers establish an IRA auto-deduction policy for their employees. That way the employees of small businesses will automatically be saving for retirement. The bottom line is that we need to be more self-reliant. Clark believes that having the discipline to save for retirement builds the character of our country.

There's a big change coming to the rules governing your 401(k) in January. In the past, many people were passive in their investment strategy. They might enroll in a 401(k) and have the deductions taken from their paycheck, but they would be very hands-off when it came to deciding where to invest their money. So employers would automatically default the funds into stable value or guaranteed income funds. While these funds may sound good, they're really like puny savings accounts. You need to beat out inflation when you're planning for the future -- and parking it in savings is not the way to go. Under the new rules, if you can't decide how to invest your money it will be put into the stock market unless you tell your employer otherwise. Clark knows that many people are reflexively afraid of the stock market. You can definitely get burned with stocks in the short run, but they're great for long term. Owning a business is one way to get ahead in life, and stocks allow you to own pieces of businesses. When it comes to your 401(k), Clark really likes targeted-retirement portfolios. With these options, your money is put into various investments over the years based on your age and target retirement date. So when you're in your 20s and 30s, you might be heavily invested in stocks. As you reach your 40s, 50s and 60s, you'll be put into more conservative investments. That way you're able to make a lot of money early on and protect it as you get older.

How much of your retirement money should you put into your employer's stock? Not one single cent, according to Clark. Clark recalls when he first learned that companies were pushing their workers to put their 401(k) money in employer stock or only offering the company match when employees invested in their stock. It was back in the 1990s and he was speaking about retirement savings at a tech company. When he started talking about employer stock, there was a murmur that ran through the crowd. It turned out almost all 600 employees put a big chunk into their company stock. When the dot.com era went bust, those workers lost 90 percent of retirement savings. More recently you had the same thing happen during the Enron and WorldCom scandals.

The latest news in this arena now comes from Countrywide Home Loans. The nation's largest independent mortgage lender is facing a lawsuit because it required employees to receive their match in company stock. Countrywide also allegedly pushed employees to put their own money in company stock. As the mortgage mammoth's profitability has declined, its employees' retirement stashes are now in danger. Why the SEC hasn't outlawed company stock from retirement options is beyond Clark. He advises people who have been contributing to company stock to stop, and instead put their money in a targeted retirement portfolio option. This will adjust your risk based on the years you have left until retirement. Half of your money should be in a total stock market plan, so you don't have all of your eggs in one basket. You may also want to check out some overseas mutual funds since the capitalist market is expanding abroad rapidly. Clark wants you to spread your retirement investments among hundreds of companies instead of gambling on just one -- the one where you get a paycheck.

The stock market has been very unstable the last several weeks with huge gains one day and huge losses the next. The volatility has caused a lot of fear in investors. There was a recent study that found people who pay too much attention to the market make poor investment decisions. That's probably because the financial press and outlets like CNBC tend to hype stock news and get people worried. But if you're still years away from retirement, just diversify your investments to spread out the risk and don't worry about every little bump in the market. After all, even investors who rode out the Great Depression eventually got some nice returns. Clark doesn't plan to adjust his investing strategy just because of stock market volatility. He thinks CDs and 401(k) options are relatively safe choices. If, on the other hand, you need your money in the next few months or years, you have to make investments that are very safe. Clark's Investing Guide provides info on some great options.

More than 70 million Americans have no option for saving for retirement at work, according to The Los Angeles Times. And what happens when we don't have options? We don't do anything about it. One reason is inertia. People just can't get motivated to do things on their own -- so they get stuck. But another reason is because all of the plans can be quite confusing. Clark calls it "Alphabet Soup." The good news is that you can now set up an automatic draft program to fund a Roth IRA. TIAA-CREF and Vanguard have great plans. So, set it up and then you can forget all about it. Just make sure it becomes automatic for you.

Clark says he needs to get better about talking in "shorthand" -- using specific industry terms without fully explaining them for the average listener. He sometimes forgets that most people just aren't as familiar with these words. This is especially true on the topic of investing. One example is the term "asset allocation"-- less than one in five people knows that it means to "diversify" your funds, or, not put all your eggs into one basket. Clark wants to define these things more clearly for listeners in the future. "Bonds" are another topic not fully understood. Here's how they work: A company or organization needs money and issues some bonds. People buy the bonds, get the interest promised, and ideally, hold onto them for the life of the term in order to get the purchase price back at the end. But let's say you have a bond that promises 5% interest, and now interest rates are at 6%. The issuing company would have to discount the initial price of the bond to get people to buy them. On the other hand, if a bond is paying higher interest than the current interest rate, it's worth more, and will therefore cost more to buy. So, as interest rates go up, the value of bonds go down, and vice versa. Another misunderstood topic is Roth IRAs, which are investments that allow you to save money tax-free. But if all these terms bore and confuse you, read Clark's online investment guide. He lists what he feels are the best companies and services that can help make retirement investing much, much easier for you.

The Government Accountability Office has found out that 401k plans are ripping off workers investing in them by swiping massive fees from you each year. Some of them are taking as much as 5 percent a year off the top. Under law, there is no requirement that you be told what you’re being charged for “maintenance and fees.” So, it’s allowed insurance companies to take advantage of investors. If you own a business, you need to ask point blank exactly what you’re being charged. If you’re an employee and you think your account isn’t increasing as much as it should, you want to ask your human resources department what the fee schedule is. If it turns out that the plan is a rip off, you should consider moving your money into a Roth IRA. The best way for business owner to tell if they are getting taken is if your plan is from either an insurance company or stock brokerage company. You may want to consider setting up with Fidelity and Vanguard, the two biggest 401k administrators in the country. You can’t go wrong with either one, but Vanguard is definitely the least expensive. You should always save for your own retirement. But Clark doesn’t want you to get ripped off. So, ask questions and make sure you see the numbers.

Open enrollment is getting ready to happen at most companies. That means the time is here to increase the amount you’re contributing, change the funds you’re contributing to, or to start a 401k if you’ve never had one. Starting next year, employers are going to be able to automatically enroll you in a 401k plan. It’s called “Safe Harbor,” and it means companies will be able to put you in stock choices and diversify your money. This fall, however, it’s still up to you and me. So, if you’re not participating in your plan at work, get in it. It’s especially important if your company matches part or all of what you put in the plan. That is a complete no-brainer. So, get it done. If you don’t, you won’t be retiring. You’ll have to keep working pas retirement age. Also on the horizon is the Roth 401k. It’s a cousin of the 401k and the Roth IRA, and more employers will be offering it next year. If your employer offers a Roth 401k, you want one of these. Why? The money you put in is already taxed. So, when you retire, none of your money gets taxed. You’re saving about 25 percent more money, even though you’re putting in the same amount of pay. And that will have a huge affect over time.

You may remember Clark talking about “solo 401k” plans in the past. It’s similar to a 401k plan that big companies offer, but it’s only available to entrepreneurs and small business owners. You can have independent contractors working for you, but you can’t have any other employees. In other words, it’s a single-person business. So, if you qualify, you can put enormous amounts of money into a retirement account. For example, a business owner can put twice as much money per year into a solo 401k as they can into a SEP. The two companies that offer these plans are Fidelity Investments and T. Rowe Price. The third of the big companies – Vanguard – does not offer a solo 401k yet. But, with the other two, you pay nothing to have them set it up. And you can enter “no load” mutual funds or a number of other options. So, if you are an individual running a business, this is available to you and it’s a great opportunity. You want to go through T. Rowe Price or Fidelity to set one up. Just remember that you have to set it up before the end of one year to start it the next.

Clark doesn’t want you to waste money, especially when it involves money you’re saving for your future. That’s why it’s important to know what you’re being charged to have a mutual fund or 401k plan. Sometimes, in smaller businesses, employers and therefore the employees can get taken in fee-heavy retirement plans because they don’t know any better. And, companies can charge people pretty much whatever they want in fees. Well, except when it comes to members of Congress but that’s another story in itself. But the bottom line is that you have to know what you’re being charged. There are administration fees, list fees and management fees. In most small business plans, employees are paying three percent and that is entirely too much. It’s more likely if you’re in a plan involving an insurance company. And, if you are paying that much, you’re better off setting up a Roth IRA. In any case, you need to ask what you’re paying in fees – the total percentage. Only about one-quarter of people ask, according to recent surveys. Clark has a list of low-cost investments that he recommends listed here. So, be smart and choose well.

Roughly half of people are either not putting any money in their 401k accounts or they’re not putting in enough to get a company match. By failing to contribute at least 6 percent, you’re missing out on an automatic raise from your employer. You will get an automatic 3 percent more from your employer if you invest at least 6 percent. That's probably what you got this year for a raise, right? Well, this is another three percent! Are you saving in your retirement plan at work? If not, you should be! Yes, Clark said should. In fact, he’s in favor of mandatory savings. Roughly half of people blow all the money in their retirement accounts when they move to a new job. And that means tons of money in penalties and fees. So, be sure you’re putting at least enough to get the free money, more if you can. You will be glad you did.

Clark wants to warn you about this decision. Hear what he has to say about how to save for retirement wisely. Click here to listen.

One in four people who participate in their 401k plans don’t put enough to get the company match. Usually you have to put in 6 percent to get a company match, but it’s free money! If you do nothing else, you should enroll in your 2006 plan. Most employers don’t offer pensions anymore, so the responsibility is on us to save money for retirement. And, if you can, increase the amount you’re putting away by 1 percent every time you get a raise. And make sure you’re not putting any of the money into company stock.

Have you heard of a “social contract?” It’s an agreement that used to exist at companies where workers spent their entire career at one company and got a pension when they retired. Somewhere along the line, companies decided they weren’t going to honor those agreements. As a result, taxpayers end up paying for pension benefits of companies that shirked their responsibilities. And that is causing problems at companies where bankruptcy is a possibility. The airline and auto industry are two that are on the line, for example. And some companies may not make it, meaning the pension goes away. It’s a time when the only entity you can trust with your retirement is you! Many people think of their pension as the cake they get at retirement. Clark wants you to think of it as the icing on the cake. Every dollar you save on your own is a dollar you have to live on when you retire, and that is a guarantee. No one can take that away from you. If you’re under age 50, social security is not going to do it for you. So, if you’re not in a 401k, a SEP or a SIMPLE, get in one today!

You should be getting your “open enrollment” benefits package at work in the next few weeks. It’s the time when you decide whether you are going to contribute to a 401k plan, how much you’re going to contribute and if you are going to take out life insurance. It may be an extremely short list or an exhausting list. But you want to pay attention to some things very closely this year. First of all, employers are drastically changing the options available to you and how you enroll. There are also new rules coming with Flexible Spending Accounts (FSAs) as well. People have been reluctant to take advantage of these plans because they have had a “use-it-or-lose-it” clause. But if you enroll next year, the amount will roll over to 2007. So you have roughly 15 months to spend your money. In addition, for the first time you’ll have access to a Roth 401k. It works like a Roth IRA in that you put after-tax dollars in your 401k plan. For most people, doing a Roth 401k will be more beneficial for you over time because you pay no tax when you retire. You can also put in much more money - $15,000 compared to $4,000 into a Roth. And you can mix and match these two.

What percent of people participate in a 401k plan at work? The most recent statistics show that it’s down to about two-thirds of people. And of those people, only a few are contributing the maximum. If you’re a young person, social security isn’t going to cut it when you get to retirement age. To that end, Fidelity Investments has been touring companies, discussing the idea of Congress enforcing automatic enrollment in the workplace. It turns out that 80 percent stay in the plans when a company has automatic enrollment, which is great. Clark thinks participation should be mandatory, not optional. Some may see that as an infringement on personal liberties, but something needs to change if we want to prevent more people from entering poverty in an old age. If your company does not have an automatic enrollment program, it’s up to you. Do not put this off any longer!

Many employers are adopting procedures where they automatically enroll employees into a retirement plan. Others are increasing your contribution every year or every six months. And some are starting “rolling enrollments” where people can join anytime of the year. Clark thinks all of these are great. There is no reason for people not to contribute to a 401k plan and every reason why they should. It’s for our own good. Of course, the company is getting something out of it too. If not enough people are contributing to these plans, the company loses its opportunity to offer the plan. So, it’s about feathering their nests, too. This seems cynical, but it is still great because everyone wins. Do you agree with employers being able to force you into a 401k?

A new study from Hewitt & Associates shows that about one in two people liquidate their 401k money when they leave a job. When you do this, your nest egg becomes a goose egg. When you cash out your 401k, a huge amount of that money goes to taxes. For example, if you have $5,000 saved up, $2,000 goes straight to taxes if you cash out your 401k when you switch jobs. And it seems to be a generational thing. Almost 70 percent of people in their ‘20s cash out of their 401k plans when leaving a job. At 30, it goes down to 50 percent. But even 40 percent of people in their ‘40s cash out of their 401k plans. You need to leave the money alone and let it grow. You will be much happier in the long run.

Parents are saving for their kids’ college education in very large numbers these days. That’s a great thing, except if you’re doing it in place of saving for your own retirement. According to Allstate insurance, half of parents are saving equally for retirement and college. And one in seven are saving only for their children’s college and not at all for their own retirement. This is not a good idea. If you’re putting off saving for yourself, you not have had enough time to build up what you’ll need. There are no scholarships or financial aid in retirement, and you need your money to compound over time. So, as long as you’re putting the max you can into your retirement account, feel free to save for college. If you could be putting more into your retirement plan, put off the 529 plan until you get a good nest egg going. Don’t be scared by the statistics about how much college will cost. You’ll make it happen.

The former muckety mucks from MCI, Enron and other companies are finally being held responsible for cooking the books at their companies. So what happens to the employees? Because they bought heavily in company stock, they hit financial bottom once the companies’ misdeeds were discovered. A new study found that $1 in $4 of the money people have in 401k is in company stock. That is scary. The appropriate amount should be ZERO! There are certain companies that only allow their employees to invest in company stock if they enroll in a 401k. And Clark thinks that is appalling. It’s completely dishonest to require employees to invest in company stock only. If that is the case, invest as little as possible. And the second the “holding period” is over, you want to dump that stock and diversify your money. But if you don’t have to put your money into company stock, NEVER EVER do this. It’s not necessarily a crooked company cramming this down your throat. But the company is putting your future at risk by choosing this kind of plan. You want to be an investor not a gambler.

Hewitt Associates, Harvard University and the University of Pennsylvania worked together on a study recently to figure out why people don’t invest in their 401k plans at work. Hundreds of thousands of people who have access to 401k plans at their companies don’t invest. And that includes companies that match money at least some of the money put in. Clark doesn’t understand why people would choose not to put money into these accounts, especially when the company is giving them free money. The reasons people don’t invest are vast and numerous. They include the following: 1) they are paying down debt first, 2) they plan not to stay with the company very long, 3) they are simply procrastinating, 3) they are confused by the process, and 4) fear of government corruption and corporate scandals. Yes there have been rotten apples in the barrel, but in general 401k plans are very safe. And it doesn’t matter if you’re not planning to stay in a job long. You can take the money with you when you leave! You can guarantee your retirement will be paid for if you just put some money away. The younger you start, the better. And remember that the amount of 401k money you want in company stock is ZERO!

Research is out from two sources today, confirming that most people have stayed in their 401k plans despite the downturn in the economy. The Investment Company Institute found that most people who participate in their 401k plans at work stayed involved steadily with a good division between stocks and bonds. According to financial writer Kathy Kristoff, people in their 30s have about half of their money in stocks. Investors in their 60s have about one-third of their money in stocks. Clark would like 30-year-olds to have 60 to 75 percent in stock choices, and older folks bump up their percentage to 50 percent. But as long as people are investing, that is what matters. If you are not putting much money in your 401k plan, please start. Put at least a dime on every dollar into a 401k. If you’re saving some, Clark wants you to save more. If you’re under 50, you want two-thirds to three-quarters of your money in stock. The other study was from Merrill Lynch and it surveyed what kind of return people think they should make on their returns. Turns out, the average is 22 percent, which is just not realistic. Be careful with your expectations. Another option is a Roth IRA. Keeping money in a Roth IRA is very smart because it’s 100 percent yours.