A few tweaks could help you meet nest egg goals

We want to be good retirement savers, we really do. But many working Americans find the process intimidating, confusing or financially impossible.

To get some tips on how to fine-tune your 401(k), where contributions come out of your paycheck tax-free – and often are matched by the boss, we talked by phone with Mary Beth Franklin, senior editor of Kiplinger’s Personal Finance magazine, who spent weeks researching the topic for the magazine’s October issue. Here’s some of her advice:

Q. Trying to save for retirement can be daunting. How do you know if you’re saving enough?

A. People have to rely on themselves for their future retirement. We’ve got the first of baby boomers turning 65 who still have pensions. But going forward, those who are middle-aged and younger will really be on their own. The onus of making sure you’re doing it right, that you’re setting aside enough for your retirement, falls more and more on the shoulders of workers themselves. Now is a great time to reassess your plan.

Q. What’s the magic formula for how much you should be socking away in your 401(k)?

A. You should be contributing about 15 percent of your gross salary a year; that’s combined between you and your employer. If you’re contributing 10 percent and your employer is matching 50 cents on the dollar, which is typical, that’s (an additional) 5 percent.

Always contribute at least enough to get your employer match or you are walking away from free money. Nobody can afford that. If you don’t take the 3 percent your boss was going to give you in 2010, it’s gone forever.

Q. What are some quick fixes employees can make to fortify their retirement accounts?

A. A typical 401(k) plan participant is a 45-year-old employee earning $50,000, who contributes 6 percent of salary, has a 50 percent employer match (combined contribution: 9 percent of total salary) and plans to work full time until age 65. Assuming an average annual return of 6 percent, that person would have a nest egg at retirement of $420,000.

Q. What if you’re in your 50s or 60s and don’t have two decades left to stash away enough for retirement?

A. Those are the ones hit hardest. You probably have to save more and may have to work longer to come up with a nest egg that you consider comfortable.

If you lost your job at 58 and can’t find a new job, a lot of these strategies aren’t going to help. We’re quite aware that for many people, it’s a dismal situation.

But those coming of age in the work force today – 20-somethings and those in their early 30s – will be in an environment where the only retirement plan available is a 401(k). This is the new normal for them. By the time they reach retirement age, they’ll be fine.

Q. What if your company doesn’t offer a 401(k) plan?

A. Roughly 50 million Americans don’t have any retirement plan at work … generally those working for businesses that are too small to make it financially viable to offer retirement plans.

But everyone who has a job can set up an IRA. You can have your paycheck make direct deposits to your IRA. There’s no excuse: if you don’t have a 401(k) at work, set up an IRA.