In a recent article, Kiplinger.com featured six ways to retire rich. The article is an excellent resource, and worth a full look. Below is a summary of what participants need to do successfully save for retirement:

Don’t Opt Out
According to the article, in a study by the Retirement Made Simpler Coalition, 95 percent of adults surveyed agreed that automatic 401(k) plans make saving for retirement easier, and 85% said they started saving earlier as a result. Only 7% of those who had been automatically enrolled opted out. Also, many plans start their contribution rate at 3%, which is lower than what many financial advisors recommend. It is a good idea is to keep increasing your contribution rate (including those whose companies have automatic escalation, but who typically stop at 6% of pay).

Get Help From the Pros
If your plan offers participants assistance with choosing their investments, whether through advice services, target-dated funds or plan-sponsored asset-allocation models, urge them to take advantage of it. Those who receive these types of services typically have better returns than those who try to do it themselves.

Check Your Progress
It’s a good idea to meet with a financial advisor periodically to make sure you are on track with your retirement planning goals.

Consider a Roth
The Roth 401(k) and Roth IRA allow participants to contribute up to $5,000 (in 2008) in after-tax contributions. Those contributions and earnings can be withdrawn tax-free as long as the person is 59 ½ or older and the account as been open at least five years. There are income limits for the Roth IRA (income can’t exceed $116,000 if single or $169,000 for those who are married and file jointly), but the Roth 401(k) has no income-eligibility limits.

Don’t Cash Out
Nearly one-half of all workers cash out their 401(k) when they change jobs. Doing so, however, can cost that person big-time due to tax and early withdrawal penalties as well as future earnings. If a participant is reluctant to move his or her money into a new employer’s retirement plan, he/she can roll it over into an IRA or keep it with the old employer’s plan (as long as the account balance is more than $5,000).

Sell Company Stock
Diversification is key when it comes to successful retirement savings. Many employers make the mistake of having too much of their money tied up in company stock. According to the Pension Protection Act of 2006, employers now allow workers to cash out their company stock within three years to diversify their 401(k) investments.

NADART is pleased to offer its plan sponsors and participants many of the features mentioned above, including automatic enrollment, the Roth 401(k), and target-dated funds. If you would like more information about these features or our 401(k) plans in general, please contact a NADART representative at (800) 462-3278, ext. 7161 or e-mail nadart401k@nada.org.