Many Americans are beginning to realize that they are responsible for their own retirement and financial future. They also realize that they cannot rely of the government ot support them. By preparing for your own retirement you gain flexibility and control of your financial future.

Market Returns
A final argument for boosting contribution rates is that market returns have been dismal. A number of studies have detailed that investment returns tend to improve after a difficult decade of performance. Professor Richard Sylla of New York University has studied stock market returns going back more than a century and has concluded that stocks have a solid chance of returning to posting 6.5% annual real returns, as they have historically. His indications are that the depths of the credit crisisand Great Recessionin 2008 and 2009 marked a bottom, and that return prospects are much more favorable for the coming decade.The Bottom Line
Given the shift away from traditional retirement living vehicle,s including defined benefit plans and Social Security, it will definitely pay to boost 401(k) plans and take more control over your own retirement needs. Pressure towards higher tax brackets as well as less favorable capital gains and dividend tax rates also enhance the appeal of tax-deferred savings vehicles. Finally, the potential for higher market returns, especially those of stocks, could be worth trying to take extra advantage of.

At worst, government and employer retirement vehicles won’t exist in the coming decades. If that ends up being the case, individuals will have no choice but to live off of their own savings. This is unlikely, but having higher levels of personal savings can add a further cushion and improve your standard of living in retirement. It is also going to remain the primary savings vehicle for millions of Americans going forward.

American workers are beginning to realize that they and they alone are responsible for their own retirement.

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