Tips for your pension

- Alan Lavine and Gail Liberman

Fewer than one of three persons eligible for a 401 (k) bother to contribute. Only 8.4 percent contribute the maximum.

Clark Blackman, a member of the American Institute of Certified Public Accountants (AICPA) personal finance committee, suggests taking these steps:

1. Sign up for your company's 401(k) plan.

2. Know and understand all investment choices. More plans automatically enroll you in a 401(k) when you're hired--unless you specifically opt out. But you may not always be in the best investment. Don't know which to choose? There might be a target-date or life-cycle fund that offers a diversified mix of stocks and bonds geared toward your expected retirement date or stage of life. Beware, though, that even these have different investment mixes. More stocks mean greater volatility. That may be fine when you're young. But the closer you are to retirement, the more you may want in lower-risk bonds or cash.

3. Consider the new Roth 401(k) when your company offers it--particularly if you expect to retire in a higher tax bracket. Unlike with a traditional 401(k), you'll pay tax on your contributions. But at retirement, you likely can withdraw tax-free.

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Spouses Gail Liberman and Alan Lavine are syndicated columnists. Their latest book is "Rags to Retirement (Alpha Books)." You can e-mail them at MWliblav@aol.com.