A big item for your 'to do' list

Running errands? Remember to prepare for retirement

Pick up the dry cleaning. Get the car tuned up. Purchase canned goods for the food drive. Rake the leaves. Save for retirement.

We all have lists of important things to do today or this week. But is increasing or rebalancing your 401(k) on the list?

While pension and Social Security plans accumulate as a result of working, most employees do not have to take any action on those benefits. However, the money from those plans may not be enough for the desired post-retirement income level and to cover inflation and other costs over 10 to 30 years, the length of many people's retirement. In contrast, employees can be directly involved with 401(k) plans at work and maximize the power of total retirement income planning through pension, 401(k), personal savings and Social Security.

"We have a mix of good news and bad news in retirement savings behavior at Boeing," said Stephanie Bertholf, director of Global Benefits Policy and Strategy. The good news, Bertholf said: 81 percent of employees participated in the Voluntary Investment Plan (VIP, a Boeing Savings Plan) by the end of 2003, compared with an average participation rate of 72 percent for large 401(k) plans. However, she said, many Boeing people are not contributing enough to maximize the company matching dollars. As a result, she said, "a staggering $96.8 million in available company match dollars did not go into employee VIP accounts in 2003."

In addition, many Boeing employees are not taking advantage of diversification opportunities. More than 38,500 VIP participants made contributions to just one fund as of June 2004. The plan's catch-up contribution feature, for workers age 50 and up, is also underutilized. Only 7,500 employees who are at least age 50 were making catch-up contributions, out of the 50,000 who are eligible.

National data shows positive trends for 401(k) plans. Added contributions and a rising equity market helped boost the average 401(k) account by 29.1 percent last year, according to the Employee Benefits Research Institute. According to the EBRI/Investment Company Institute 401(k) database, the average account balance for those who have maintained accounts at least since 1999 was $76,809 at the end of 2003, up 17.1 percent from the 1999 figure of $65,572. The average account balance in Boeing's VIP was $110,000 as of June 2004.

Getting going

So, how can employees gain significant savings results, even in a short time frame? Experts and advisors provide a variety of models and recommendations.

Most U.S. employees at Boeing can use online retirement modeling tools, available through the TotalAccess My Savings and Pension page, to project their pension and savings benefits (some employees may need to call TotalAccess for pension projections).

In addition, Boeing employees have access to an initial free financial consultation with a certified public accountant, financial planner, budget specialist or licensed securities broker through the company's Employee Assistance Program. The financial counselors provide telephone-based consultation for issues including debt management and retirement planning. Call toll free at 1-866-719-5788 and select Option 2.