For as long as most of us can remember, encouraging employees to invest money in retirement plans has been the norm. Not everyone does. And among those who do, the majority do not save enough to live the comfortable kind of lifestyle they are hoping for in retirement. A longer life expectancy made possible through advances in medical science is only making things worse.

Never in our country’s history has it been more important to invest in a 401(k), pension, IRA, or some other form of retirement plan. This post will focus on 401(k) plans seeing as how they are the most popular retirement vehicles among U.S. workers. It should be the case that every employer offered their workers the 401(k). That’s not the case, but most of us wish it were so.

The Longer Life Dilemma

It would be irresponsible to say that people living longer is the biggest inhibitor to saving enough for retirement. It’s not, but it is a factor nonetheless. According to a New York Daily News story published on January 31, the average American can expect to live into his or her mid-80s. Someone who retires at 65 can live another 19 or 20 years.

If a retiree is used to living on $50,000 annually, he or she would need a $1 million retirement fund to maintain the same lifestyle for 20 years. That money could come from a combination of Social Security, a 401(k) plan, real estate, life insurance, and any other investments the retiree might have. But guess what? The bulk of a person’s retirement money comes from a 401(k) plan.

As you can see, living 20 years beyond retirement presents a serious financial problem. If that same retiree only lived to 75, the amount of money needed to sustain him or her would be cut to $500,000. But by extending life expectancy into the mid-80s, we are expecting people to provide for themselves for many more years after retirement.

Start When You’re Young

We all know the secret to saving enough money for retirement: starting when you’re young. An employee investing in a 401(k) plan beginning at age 25 stands a lot better chance of having enough money in retirement than someone who waits until age 45. In the world of retirement investing, time is the worker’s best friend.

Time allows an investor to start out with low risk investments that guarantee a fairly safe return. He or she only needs to be more aggressive as retirement age approaches. But by that time, the bulk of the person’s retirement savings should already be intact.

How Employers Can Help

There is a general rule among America’s employers that companies able to afford 401(k) plans actually offer them. So why do so many not have a plan? Because they are expensive. The typical 401(k) plan is funded by a combination of employee contributions and matching contributions from employers. Companies simply don’t have that money to spend – especially in light of ever-increasing healthcare costs. So what can they do?

Benefit Mall, a national payroll and benefits administration company based in Dallas, says there are innovative 401(k) plans that are very affordable. Employers will not find them in the general marketplace, but they will find them through companies like Benefit Mall. These innovative plans can help employees start saving for retirement without being an excessive financial burden to employers.

We are living longer than ever before. That’s good in one sense, but it’s also creating a financial burden for people during retirement. Hopefully more companies will start offering 401(k) plans as our economy improves.