Retirement the best investment

About twenty years ago most workers had their own retirement insurance plans at work and people could be certain of some income after retiring from their jobs. The employer would take care of fixed monthly retirement payments for the employee and there was nothing to worry about. Nowadays the tables are turned and employees have to make sure that they have some kind of retirement plan or they will end up without any source of income when they retire.

It appears that most workers end up saving too little money for when they retire and this will cause financial problems in their future. Employers are now considering offering some kind of new retirement scheme to employees, one that both employers and employees could benefit from.

Some ideas that employees are considering to improve the situation are making enrolment in savings plans automatic and expanding the use of annuities to save up money for the future. Another huge step forward is the fact that employers are aiming to introduce investment plans for employers and aiming to improve employees' financial knowledge.

There is now a paper with recommendations named the "Best Practices for the Design of Defined Contribution Plans." Key provisions for the Pension Protection Act of 2006 are being made and in the paper research shows the benefits of allowing employers to enrol employees in saving programs.

It is difficult for companies to compile a portfolio of investment funds for employees to benefit from if they take part in a savings plan. There are many different types of investments and it can be complicated to decide what specific investments are right for people. That is why most portfolios contain a number of different investments. They usually contain stocks, bonds and mutual funds and employers can create a detailed information package for employees to enter the financial market.