The world of retirement savings highlights the stark contrast between between the haves and the have nots on the employment front.

Somewhere around half of us work for employers that offer a 401(k) plan, while the other half of us don't have any retirement plan options through work.

Employers that are large enough to offer a 401(k) plan often mandate that employees contribute to it. In addition, they may even periodically bump up the level of your contributions. Clark is in favor of this heavy-handed approach because it forces at least half of us to save for retirement.

Yet the danger is that people tend to go to one extreme or the other when they have a 401(k) at work. Either they put all their money into their employer's stock (a no-no in Clark's book) or else they go into ultra "safe" holdings that won't keep pace with inflation.

Those of us who don't work for an employer that offers a 401(k) plan have to be more diligent about saving for the future. The responsibility is our entirely.

Many listeners have heard Clark talk about opening a Roth account. You can open one with as little as $100 through Charles Schwab or absolutely nothing at all if you commit to regular contributions of $50 every pay period through T. Rowe Price.

Remember, if you don't have that employer forcing you into a 401(k), you might never do it. Do what it takes to be the master of your own destiny.

CLARKONOMICS: Vanguard has released a revealing report about what's happened with the typical person's 401(k) -- from the peak of the market to the bottom in March and now factoring in the recent run-up.

Those who bailed for "safe" choices in their portfolio when the going got tough missed the recovery. But those who stayed put in their holdings ended up making a full round-trip, according to the Vanguard Center for Retirement Research.

In fact, 60 percent of people are now even or up from where they were two years ago.

This just highlights (yet again) the wisdom of dollar cost averaging, where you invest in small amounts every pay period as you would with a traditional 401(k). When you dollar cost average, each dollars buys more when stocks are on fire-sale prices and less when they're overpriced during a recovery.

Of course, so much has to do with your age. Clark believes those who are under 40 are on the cusp of great opportunity for fantastic wealth. For those people aged 40-55, the volatility of the past two years has been more of a wash. And those over 55 who were heavily invested in stocks have suffered the most.

Look to international mutual and index fund choices for a meaningful position of your money going forward. This gives you a hedge against the weakening dollar and a chance to grow your portfolio based on what's going on beyond just here in the United States. Remember, the bulk of capitalist growth takes place outside America.

Finally, one stock you never want to have is your employer's stock in a 401(k) plan. So many people miss this message and later regret it. If your employer's fortunes falter, so too does your prospect of retirement.

MONEY-SAVING MOMENT: Considering a variable annuity? You might want to think again. New research shows that it takes $100,000 in a variable annuity to generate the same income as $60,000 in an immediate payout annuity.

Variable annuities are sold by insurance salespeople as "can't lose" investments. They're getting another boost in popularity right now because of people's fears about the recent stock market meltdown.

Syndicated financial writer Scott Burns recently took an in-depth look at variable annuities. "This year, as with many preceding years, variable annuities are a good deal for insurance companies but a lousy deal for investors," Burns writes in his report.

Let's take one step back -- what exactly is a variable annuity? If you ask those who own them or want to buy them, they have no idea! Clark describes a variable annuity as a contract with the insurance company that masquerades as an investment with insurance wrapped around it.

Variable annuities come with huge sales commissions, huge expenses and a huge tax burden to you. And if you want out, you usually have to pay a massive fee known as a surrender charge.

Burns' analysis also contrasts variable annuities with index funds. Remember, index funds are usually sold commission free. No surprise then that index funds blow away variable annuities over 80 percent of the time.

And the coup de grace here is when Burns contrasts variable annuities with life annuities (aka immediate payout annuities). Insurance people hate to sell life annuities because they don't have big commissions. But as stated earlier, it takes $100,000 in a variable annuity to generate the same income for you as $60,000 in an immediate payout annuity. See Burns' article for an explanation of how he arrived at that calculation.

So when you're pitched on a 'can't lose' variable annuity, remember Clark's words and Burns' research.

Morningstar has taken an in-depth look at target-date retirement funds in a new research report.

Target-date retirement funds allow you to take a "set it and forget it" approach to investing. You simply identify your expected year of retirement and then put all of your 401(k) or Roth contributions into the matching target-date retirement fund. Fund managers then steadily decrease the level of risk in your portfolio as you approach your retirement date.

Morningstar's two favorite companies for target-date retirement funds are Vanguard and T. Rowe Price. That info jibes very nicely with Clark's favorite picks on his investing guide. One area where Morningstar and Clark diverge is on Fidelity. Clark likes Fidelity for target-date retirement funds, while Morningstar does not.

Remember, all of the companies we've discussed so far sell their target-date retirement fund commission free.

But what if you absolutely want to pay someone to pick a target retirement fund for you? Morningstar suggests you're likely to have a good experience with American Funds, one of the largest commission houses. Independent studies have in the past confirmed this.

How often do you look at your 401(k) or IRA? In times of economic turbulence, there's the tendency to look often at the losses and think the sky is falling. But the sky is only falling if you need that money today. The real danger comes when we beat ourselves up over the losses and sell our holdings -- thereby locking in the losses.

Vanguard founder John Bogle has a radical idea that runs counter to what most people do: In a San Francisco Chronicle article, he suggests that you should never check your retirement funds until the day you retire! Bogle's thinking is that you'll do fine if you're suitably diversified.

Clark has been a long time advocate of diversification. He particularly likes the Total Stock Market Index fund for investing in a broad range of American capitalism. In addition, it's important to put some of your money overseas because that's where capitalism is really ramping up. Beyond stocks, you may also want to have some bonds and possibly up to 5% or 10% of precious metals in your portfolio.

Should you stop contributing to your 401(k) or other retirement account and sell everything you've got? That's a question that Clark hears from people multiple times a day.

Barron's recently ran a story comparing our current market situation to the 1930s. These kinds of stories create anxiety that is not necessarily a bad thing when it comes to investing. During the last 20 or 30 years, we'd gotten to a place where we practically expected that money will grow if you just pop it in the market. This is now the first time many investors are experiencing rough seas.

Retirees are particularly scared about their holdings declining before their eyes. So many people at the studio have asked Clark to talk to their elderly parents and set their minds at ease. Clark's own mother-in-law even calls him a Pollyanna!

If you're still in the working years, the antidote for anxiety is simple. Stop trying to figure out if we've hit the bottom and stop trying to find safe havens for your money.

As an aside, Clark says the speed with which oil and gas prices have declined is actually a negative indicator. It may feel good when we fill up at the pump, but the decline is not for a good reason. A good reason would be that we have a new economical method to fuel our vehicles, and he still believes this will happen.

So why would the penny-pincher still encourage you to put money into your retirement plan month-by-month and paycheck-by-paycheck? Even in the darkest days of the '30s, people who continued contributing eventually made big money. They simply bought more shares at lower prices.

One tip for our older listeners who have retired: Do not sell out all your holdings. If you are truly worried, try doing reverse dollar cost averaging. That's where you take out a little money each month. By still leaving the bulk of your money in the market, you won't miss the recovery. But you will lower your exposure in increments and that may give you some psychological peace.

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 Humberto 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.

Once upon a time, Americans worked for 1 employer for an entire lifetime. They also got a pension for their years of service. Back then, you didn't have to save for retirement or make any of the accompanying investment decisions.

Today, only government jobs and a small number of large companies still offer pensions. The rest of us are on our own. Unfortunately, the average worker is faced with an alphabet soup of retirement options -- everything from the 401(k); to the 403(b); to the SEP if you're self-employed. Just figuring out the terminology itself can exhaust, bore or intimidate you.

Once you get past weighing the merits of a 401(k) or a Roth IRA, for example, then you have to choose individual investments to actually put your money in. Most people don't have the first clue. That's why Clark compiled his investment guide to give you a starting point.

Clark is a big fan of targeted retirement funds, which offer a very hands-off approach to retirement planning. With these choices, you pick the year you expect to retire -- let's say 2040. Then you buy the 2040 portfolio and sit back. Over the next 30 years, the company you choose picks a mix of stocks and bonds to get the best returns with the lowest overall risk. As you get closer to 2040, your investments automatically become less risky.

Forbes now reports there are 289 different targeted retirement funds in the marketplace. So which company offers the best? That would be Vanguard. This financial house offers no load mutual funds; no hidden 12b-1 fees; and management costs that are about one-sixth the average of other companies. T. Rowe Price and Fidelity Investments are also good places for your targeted retirement funds. You can't go wrong with any of these 3 low cost houses.

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 Humberto 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.

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 indebt ourselves into oblivion. But that's a choice. And if you make it, you may have to work your whole lifetime and never stop.

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.

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.

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.

People often contact Clark asking about good free budgeting tools online. Clark recently discovered one free site that he really likes called Wesabe.com. If you're curious about that name, it apparently derives from saber, the Spanish word for "to know." So the name is a Spanglish-ism that roughly translates to "we know." Wesabe.com offers you the opportunity to assess your finances and make sure you're on the right track. It's a community-based site, so that means you'll find users of the site helping each other. Clark wants people to know that there's no one right way to save for the future. Some people like the envelope system, while other use the pay-yourself-first method. Wesabe.com is just another tool in the toolbox that you might be able to put to work. Another site Clark likes is FinancialEngines.com, which can help you plan your retirement. It uses the Monte Carlo analysis method, and tries to prepare you to meet your financial goals even when factoring in the odds of a market crash.

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.

In the days when people would spend an entire lifetime working for one employer, they were frequently given gold watches at their retirement parties. While that tradition may now seem old fashioned, there's one thing that's becoming even more antiquated: pensions. The Los Angeles Times now reports that two-thirds of those employers who still offer pensions are eliminating them for new hires or planning to do so in the next few months. It's getting to the point where pensions will be a forgotten concept for future generations of workers.

The reality is that you need to think in terms of how you are going to pay for your own retirement. You can not rely on somebody else; that kind of support is increasingly not there. Clark recalls the donnybrook that took place in the Supreme Court when IBM battled to change its pension plan. The computer maker won and cheated out longtime employees who were counting on pension funds for their retirement. The moral here is that if you're relying on a company to provide for you or your family in the golden years, it's time to reassess your plans for the future.

It’s not unusual for people to have more than 25% of their 401K in company stock. This is a potential disaster in waiting. Often, our employer will encourage or push us to put our money in company stock. In Clark’s opinion, you should never have a single penny in company stock, because the risk is too great. Retailers and manufacturers come and go. For example, did you know that K-Mart used to be the largest retailer in the U.S., and ultimately ended up insolvent? General Motors used to be seen as invincible, and now some financial analysts predict they could end up bankrupt. So, it’s great to be optimistic about where you work, but don’t put all your eggs in one basket.

More than 70 million Americans have no option for saving for retirement at work, according to the L.A. 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.

Over the years, Clark has always preached about saving a dime on every dollar you make. If you want financial security and freedom, that’s what you need to do. Simple as that. But what if you are older and you’re trying to “catch up?” A study published in the Journal of Financial Planning shows that adjustments must be made based on your age and income. Some people just can’t take a dime on a dollar as the automatic answer. If you’re making between $25,000 and $35,000, you don’t have as urgent a need to save. That’s because social security benefits will still be meaningful to you. People who earn more won’t be able to depend on social security benefits, so will need to save more. Typically, the goal is a dime on a dollar if you start saving in your 20s, 15 cents on a dollar is you start saving in your 30s and 20 cents on the dollar if you start saving in your 40s. Another way to look at it is if you’re 30 and you make $40,000, you will need to save 10 percent to have a comfortable retirement. If you’re 30 and making $80,000, you need to bump it up to 15 percent. If you're older than 50 and you haven't saved a dime, start saving as soon as possible. And realize that you may have to work a little longer than expected.

How do you know if you’re going to have enough money for retirement? There are calculators out there, but most of them are either too complicated or not at all helpful. Well, that is about to change. Fidelity Investments has spent a ton of money on an artificial intelligence tool that calculates exactly how you’re doing and how much more you need to save. It’s called “My Plan,” and Clark tried it out. It was a short series of questions that let him know he is okay financially. He had to register first and he was worried about getting a lot of junk mail as a result. So far that hasn’t happened. So, click here to try it out.

Clark saves about 75 to 85 percent of what he makes these days. That’s due in part to the fact that he has no debt. But he also is a bit abnormal when it comes to saving. On the flip side, many more people his age are at the opposite end of the spectrum and aren’t saving a penny. Baby boomers are a huge part of the retiring population these days. It’s so skewed that the U.S. can’t afford to keep giving Social Security benefits after retirement. And for those who are 40 and younger, times are going to be even tougher. Start putting money into these plans now, if you’re not already. Clark thinks we need to change the age when benefits are available. People are living a lot longer and the system has had to pay for 20-plus years of retirement. That’s ridiculous. Also, if you are an entrepreneur, you have a lot of flexibility now that solo 401ks are available. The SEP is another great plan for business owners. The great thing about these plans is that in a bad year, you don’t have to put away any money. But in a good year, you can put in as much as $44,000!

Annuities sell in huge dollar amounts each year because they are so heavily pushed. People would never buy these products on their own. But salespeople push them so hard that annuity sales are outrageous. Clark is not a fan of annuities and the one he despises more than any other is a “variable annuity.” Salespeople will say these are “tax sheltered products,” which sounds attractive and lucrative. But with these annuities, you’re just avoiding taxes temporarily. So, when you spend the annuity, you’re taxed double. That in itself makes it a defective product. Even worse, the cost is sky high. And the third red flag is that you can’t get out of these products unless you pay a huge surrender fee. The cousin to the variable annuity is the “indexed annuity,” and it is equally as bad for your wallet. The only decent annuity is one that’s called an “immediate payout annuity.” This is a product you would buy if you think you’re going to outlive your money. You might take 25 percent of your retirement money and buy an IPA. Then, every month you automatically get a check. Now, you don’t want to put all of your money in an IPA because your family would have nothing to inherit if you died. And, if you die next week, all of your money is gone. But if you live a while, you will make money off the insurance company because the company has to keep paying you as long as you live. In addition, these products have very small commissions. Salespeople won’t mention them because of that fact, but you may want to ask about them.

Only a sliver of the population was into money and investing when Clark went on the air in the ‘80s. But today, people are really into investing and learning more about how to save for retirement. Part of the reason is because people no longer work for one company their entire life. People move around and so does their money. Over time, the cost of investments is what matters. Vanguard, for example, has the lowest costs and fees of any investment company, according to Smart Money magazine. And that will make a huge difference in the amount of money you end up with. The run-of-the-mill mutual fund will have a management fee of 1.5 percent of your money. Vanguard has about 1/10 of that fee, and Fidelity has fees that are 1/15 the cost of regular fees. You may think you’ll get an inferior product if you’re paying lower fees, but that is simply not true. Stick with the best companies – Vanguard, Fidelity and T. Rowe Price.

Would you believe that half of all teachers quit in the first five years of employment? It happens because teachers aren’t paid enough and because they burn out. But it also happens because teacher’s unions are ripping off their own members in their retirement plans, according to the LA Times. Teachers receive a special retirement fund called a 403b plan. And teacher’s unions are asking insurance companies for kickbacks in return for designating those companies as the teachers’ 403b company. One company mentioned in the article was ING. That in itself is shameful. But the teachers are the ones paying for it with huge management fees. Above board companies such as T. Rowe Price get 0.35 percent for management fees from teachers. On the other hand, companies that are in the union deals are charging teachers ten times that amount. In one union deal in California, teachers are paying 25 times that amount. Teachers can get out of these ripoff plans by doing a 1035 Exchange. Think about going with one of the lowest commission companies such as TIAA-CREF, Vanguard or T. Rowe Price. It will save you a ton down the road.

Clark is a big believer in “lifestyle funds” or “lifecycle funds”. These are investments for people who are either bored with or intimidated by investments but would like to have someone look after their investments. Vanguard, Fidelity and T. Rowe Price all offer these kinds of investments. You basically pick a target year when you’re planning to retire. You choose that fund and start investing right away. The companies have a targeted portfolio every five years from today. The mixes of stocks and bonds continually changes through the years based on your age and, therefore, the amount of risk you need. This is a great alternative if you can’t decide what to do with your money. About half of all households have not gotten started with retirement savings, in part because they can’t decide what to invest in. If you intend to save for retirement after you do something else, you’ll never get it done. So, do this now. Check out the list of funds on Clark’s invsting page. Vanguard is the lowest in cost, but all three companies are great.

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What are the chances that your teenager or young child will have any meaningful social security benefit? Little to none. The math simply doesn’t work when you consider the number of people who will be working versus the number of retirees. Clark thinks Democrats will have to fix our problems with social security, but something needs to be done. Our neighbors across the pond are actually going through the same thing and their idea is one we should consider. The Labor party in Britain has proposed that the country increase the eligibility age, increase the benefit and require mandatory personal accounts. Clark is a proponent of having a mandatory personal account requirement and no social security at all for people below a certain age. It’s a bit radical but we need something. In Britain, people would have to put a minimum of 4 percent of your pay into a personal account, and your employer would match it. You can put up to 16 percent. But the reality is that people don’t save unless they’re made to. Otherwise, people wait for the government to take care of them. And that is not going to be possible in the future. You have to consider your own future now. Yet, overwhelming, people who earn less than about $45,000 a year don’t save any meaningful retirement. That needs to change.

A new study published in the Boston Globe shows that more than half of baby boomers are going to have to work past retirement age. By their own admission, these people don’t have enough money saved to be able to retire. Not to mention the fact that many people think they have more than they really do. About 30 percent of people have saved enough to last them about two years after retirement. And one in seven people have no money saved at all. About the same number have enough to live comfortably. So, it’s a big bell curve. Those born in the 40s, may not be able to get out of this working cycle. But if you were born in the 60s, you still have time to reverse this trend.

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!

Almost 19 million people are running micro-businesses in the U.S. today. That means one person is running either a full-time or part-time business, and Clark is so excited about that number. The flip side to this is that one in three of these micro-business owners have nothing saved for retirement. About a quarter have minimal savings, meaning it would not last them more than a year. Those who have saved enough for retirement is a measly 7 percent! Entrepreneurs fuel our economy, and they need to stay solvent and take care of themselves. There are special tax breaks for entrepreneurs, too. So you must consider the future while you’re working on your dream business.

There has been a lot of disturbing news about pension plans these days. People who thought they would have a nice pension in retirement are being told otherwise. And if a company files bankruptcy, there is no requirement to pay employee pensions. It just happened at GM, where many retirees lost everything. The company is much smaller than it used to be, in part because GM doesn’t sell nearly as many cars as it used to. Yet, there were tons of former employees who had retired and expected their pensions. GM’s current employees are supposed to be taking care of those retirees, but there just isn’t as much money or business coming in. The same thing has happened at Sears, which used to be the No. 1 retailer in the country. Due to dwindling sales, Sears has eliminated all kinds of benefits for retirees. So, the odds of companies helping to pay for your retirement are next to nothing. People graduating today are in a different boat. Many don’t even know what a pension is because they just don’t exist anymore. It’s another reminder that you must plan for your own retirement.

A survey by the research company Harris found that just one in four people feel they will have enough to retire. Worse yet, the less money people make the less they save and the less prepared they are. It makes sense that people who make more money can put more aside. But of high income earners ($75,000 and above), only half think they are prepared. Only 30 percent of middle incomes earners believe they are prepared, and only 20 percent of average income earners are prepared. Is it the end of the world if you don’t feel prepared? No! Retirement planning is a modern concept. Before the late 1800s, people just worked until they died. Today, people can retire and just have fun at the end of their lives. But we need to stay on top of it, regardless of what happens. Illnesses and job loss are two of the main roadblocks. But sacrifice in early years is what will get you there.

A survey done by Fidelity Investments found that one-third of today’s workers must keep working into retirement years because they haven’t saved enough money. Clark wants people to be able to stop working when they want to. To do that, you have to have a plan and make a commitment. Many people can’t retire because they started saving too late in life. A much smaller percentage says it’s because they made bad choices with their investments. So, clearly which funds you put your money in is much less important than whether you put money in at all. That is the most important factor. You’ve got to move that dollar out of your check and put it in savings before you spend it! And you have to keep saving money through your adult life. According to the survey. If you have a 401k plan at work and you’re not participating, it’s your choice. But if you don’t, you will have to work for many years to come.

Clark discussed a column written recently by Jonathan Clements, a personal finance writer and well-respected expert on the topic. The column addressed the fact that people want approval for their financial decisions, not advice. And when Clements starts to tell people about other options, people get frustrated. So, he focused on getting people back to the basics with a few steps. Here they are:
1) Make sure you put money in your retirement plan at work. Put in the maximum if you can.
2) Put your money in a low-cost mutual fund family, including those offered by Vanguard, Fidelity, T. Rowe Price, USAA, Tiaa-Cref and American Century.
3) Consider buying a “life cycle fund,” which allows the company to adjust the risk as you get closer to retirement.
4) Have money in savings.
5) Buy term life insurance.
6) Consider reducing the amount of debt you have on your home.
7) Dodge debt whenever possible by not spending more than you earn.
8) When asking for advice, don’t just look for approval. Consider what other people say because it may be the smartest choice for you.

These are very simple tasks. And if you do them, you could be well on your way to easy street.

Clark hates to hear that American consumers are saving an average of zero percent of their incomes in the U.S. Part of the problem is that people don’t know what to do about it. But Clark may have a solution for you. If you can put away $20 each month, you will be on your way. That’s right. There are mutual fund and stock-type investments that require you to invest just $20 a month, and that’s it! USAA, for example, has very low-cost program that is available to everyone. Usually, USAA serves only the military and their dependents. But you can call and enroll over the phone today. T. Rowe Price and Tiaa-Cref also have mutual fund accounts available for $50 a month. Many companies have extremely high minimums, so it’s hard to “get in.” But with these funds, you have options and a way to get started!

The reality today is that many of us will not be able to retire “cold turkey.” The AARP recently conducted a study on this issue and has reported that many more people are going to experience “phased retirement.” Basically, that means you work gradually less until you’re fully retired. It helps some people adjust better to retirement, and 4 out of 5 people said they would prefer to do it, according to the AARP. And, the Wall Street Journal has more news on retirement. The Treasury Department is now floating a proposal that would allow people to work in a phased retirement capacity and still receive a portion of their pensions. That’s a great idea, in Clark’s opinion. Just because someone is beyond doesn’t mean he or she is useless on a job. Pilots, for example, get better over time. So why not let them work part of the time and everyone benefits.

Clark saw a story recently entitled, “Why it’s Good To Be Rich.” Financial writer Jonathan Clements wrote the article and he lists 25 reasons why it’s so great to be rich. What was interesting about the article is that just about anyone can do the 25 things if they just put their minds to it. The No. 1 thing to do is pay off our credit cards each month. But people just don’t do that. Roughly 2 out of 3 people have an outstanding balance on credit cards, and they’re throwing money away as a result. The second reason is that you can send your kids to school without taking out student loans. The third reason is you can trim insurance costs by raising deductibles on policies. Rich people can also take advantage of tax-favored accounts such as Roth IRAs and 529 plans. The list goes on and on. But anyone can do these things and it will lead to wealth. It’s not just rich people who can make these things happen.

Are you getting ready to retire? Or, maybe you have parents who are about to retire. Are they going to be okay in retirement? Economists are into what’s called “Monte Carlo Modeling,” which allows people to run numbers to see if they will have enough money in retirement. Several Web sites have set up calculators and other tools that incorporate this philosophy and let people figure out how they’re doing. One that Clark likes quite a bit can be found on the Web site, troweprice.com. Users enter how much they’re making, what they think they’ll need in retirement and how your money is invested. Then the “Retirement Planning Center” will tell you whether you will outlive your money or your money will outlive you. If you’re wondering what the Monte Carlo” model is all about, it allows people to run difference scenarios based on the performance of the stock market. So, check it out and figure out what you need to do.

How are you doing preparing for retirement? Researchers from Hewitt Associates found that even people who work for large employers are not preparing for their retirement. Only one in six people who work at companies that offer plenty of handholding will have enough money at retirement age, according to the survey. It’s not what you make. It’s what you do with what you make. So, take charge of your future and come up with a plan. Determine how much you will need and start saving!

Clark gets many calls from the parents of newborns, who want to know about putting aside money for their children’s’ college education. Clark asks them first how much they are saving for themselves, and often he is met with silence. He wants you to save for your children, of course. But you need to save for yourself first. New data out shows that people are saving tons through 529 plans. Also known as college savings accounts, these are tax exempt accounts that allow you to put away money for college education. Better yet, the money is spent tax free. People have spent $50 billion this year, which is 67 percent more than last year. In the next year, it will be up to $100 billion. But please max out your retirement savings account before you start one of these plans. Your retirement savings account is the most tax efficient plan out there. Secondly, if you are invested in a 529 plan, make sure it is with a legitimate, low-cost plan that does not charge commission. Clark has created a 529 Honor Roll that gives you his top choices for plans and tells you exactly how to contribute money. Coverdell accounts also allow you to put money away for your child's elementary, middle or high school education.