Protect Your Retirement Savings Without Your Employer's Help

Feb. 17, 2009 — -- First, we killed your pension plan; now, we're taking away your 401(k) matching contributions.

That is, in essence, what corporate America is telling workers as dozens of employers rush to halt their contributions to employee retirement savings accounts as a way to weather the current economic storm.

Since June, more than 60 employers have announced they would reduce or halt entirely contributions to employee retirement plans, according to the Pension Rights Center. These employers include Motorola, UPS, FedEx, the Atlanta Convention and Visitors Bureau and A.H. Belo Corp., a newspaper company that once employed me.

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By doing so, these employers are reneging on their end of an implied deal by corporate America that made it easier for companies to escape from the burdens of traditional pension plans with the enactment of the Pension Protection Act of 2006.

That's why I say don't believe a thing your employer tells you about helping you save for retirement. Always assume you are on your own when it comes to accumulating a nest egg that will carry you through your later years.

Given that reality, let me suggest seven steps you might take if your employer is among those that have halted contributions to your 401(k) or other retirement savings plans.

1. Don't stop saving: The absolute worst response to a halt in retirement plan contributions by your employer would be to stop your contributions. Even though the incentive of an employer match has been removed, you still benefit by contributing to a 401(k) plan or other retirement savings plan.

The first benefit, of course, is the accumulation of funds to help you reach a day you will no longer need to work. But if you are young and have trouble thinking that far down the road, remember there is an immediate tax benefit to retirement plan contributions. For every dollar you direct to a 401(k) account, you can easily save 20 cents or more in state and federal taxes.