Thinking of Retiring on the Beach? Start Saving Now

Most U.S. employees know they should save more for retirement. However with the personal savings rate at negative 1.4 percent, individuals are spending more than they earn, depleting their savings and increasing debt. The task of creating a substantial savings account can be daunting, but according to the Compensation Data ñ Kentucky/Tennessee survey of 444 companies, 97.9 percent of organizations offer a solution in the form of pension plans.

Kentucky and Tennessee organizations offer a variety of savings options. Of those reporting, 54.6 percent of companies offer defined contribution plans only. Additionally, 40.5 percent offer both defined benefit and defined contribution plans to their employees.

When comparing defined contribution plans, 84.4 percent of Kentucky and Tennessee organizations offer a 401(k) plan with employer contribution. In addition, 5.6 percent of organizations offer 403(b) with employer contribution. Profit sharing is offered by 19.6 percent, while ESOP plans are provided by 11.1 percent.

In Kentucky and Tennessee, full vesting in 401(k), 403(b) and 457 plans happens immediately in 21.3 percent of companies and after five years in 37.9 percent of organizations. These numbers have remained consistent over the last three years. In contrast, the majority of organizations, 62.3 percent, providing other pension plans require five years of service for full vesting.

There are a variety of strategies for saving for retirement. Despite their differences, each consistently gives one piece of advice regarding retirement, which is to start saving now, said Amy Kaminski, manager of marketing programs for Compdata Surveys, the nationís leading compensation and benefits survey data provider. With Social Securityís future uncertain and increased health care costs, employees should take advantage of plans offered by their employers to help ensure their financial security.