Retirement Basics
An egg and money in a bird's nest with at $1 bill in the background
retirement
Those with a pension still need to save

"But what typically happens is that people stay less than seven years in their early career, so younger workers especially need to understand how their retirement plan vesting schedule works" so they don't quit before qualifying for employer contributions.

Hurdle No. 2: Company match requirements

On average, employers will give you up to 3 percent of your salary for a 401(k). But here's the catch: Workers generally must save at least 6 percent of earnings to get that full match. Unfortunately, lower-paid employees fall short, contributing just 5.4 percent of their pay to their 401(k) on average, according to PSCA. Highly paid workers are setting aside 6.9 percent of their salary.

Hurdle No. 3: Signing up

These days, nearly one in three workers who qualifies to participate in a 401(k) plan fails to enroll. That said, companies have tried everything -- from cajoling to nagging -- to get workers to save for retirement. Now they're wising up by automatically enrolling individuals in a 401(k).

Now for the fine print. Plans that enroll workers into a 401(k) typically divert only 3 percent of a worker's salary into a plan. That's not enough to qualify for the 6 percent matching contribution, warns Wray.

Hurdle No. 4: Slow-growth investments

If you're automatically enrolled, your employer may stash your earnings in safe investments, such as a bond mutual fund, that won't provide adequate growth over time.

The bottom line: You've got to seize control of your own future and save, regardless of who may be looking out for your interests.

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