Many companies have gotten rid of their pension plans and put the responsibility for saving for retirement entirely on employees' shoulders through 401(k) plans and related options. You'd think they would at least make understanding those plans easy for workers.
But instead, your bosses may be keeping you in the dark about the costs of your retirement plan -- and those secrets may stay under wraps for a lot longer than expected.
What's the Delay?
Earlier this month, the Labor Department said that it might once again push back an April 1 deadline for employers who offer retirement plans for their workers to tell employees about the fees those plans charge.
Apparently, the final versions of the rules have already suffered long delays. And since they are not even scheduled to be published until the end of this month, the government agency believes that plan providers need to have enough time to prepare before complying with the rules.
Finding the Fees in the Legalese
If you want to know how much you're paying badly enough, you can probably get most of what you need to know now -- if you're willing to jump through big hoops. You can find the numbers that you need to calculate what you're paying for your 401(k) or other retirement plan at work within the hefty prospectuses, plan documents, and other legalese-filled pages available.
But realistically, few workers have the expertise, time, or inclination to go that far out of their way to get price information that ought to be stated upfront. That's the purpose of the new rules: to get workers the information they need and have a right to as easily as possible.
Postponing the Big Reveal Once Again
Unfortunately, these rules have already been a long time coming. The soon-to-take effect rule is about 18 months old already, and was due to take effect last July, but the financial industry got it delayed until April. Now, financial providers want another full year to deal with whatever the final rules require.
Which begs the question: How can these providers know they need more time if they haven't even seen the final rules yet? If the rules are pretty much the same as the currently proposed rules, it should be easy to implement them quickly.
What may end up turning the tide is the fact that 2012 is an election year. At least some lawmakers will want to give workers something tangible before the election. Based on that, you might finally know how much you're paying for your retirement plan by the end of 2012.
Motley Fool contributor Dan Caplinger has his own retirement plan, so he can't blame anybody else for its costs. You can follow him on Twitter: @dancaplinger.
The Big Retirement Myth: You'll Spend Less
The Secret Your Boss Is Keeping About Your Retirement
There's a persistent assumption going around about what happens after one retires: Pundits, financial planners and even retirees often claim that your spending shrinks after you leave the 9-to-5 world.
Sure, your house may be paid off by then, and you may be able to ditch the expenses of commuting and buying clothes for work. That's not the full picture, though.
In good and not-so-good ways, many people end up spending more than they expect during their golden years.
For lots of folks, retirement means finally getting around to doing things you've been putting off for years. And those things cost money.
You may finally do some traveling in Europe, for example, or explore the U.S. in an RV. Want to get serious about your love for curling? Joining a league costs some money. Looking forward to overhauling the garden or taking up woodworking? That'll cost you, too. Even just traveling to visit and spend time with the grandkids can add up -- in travel costs, dinners to treat the family, and gifts and ice creams for the young ones.
Of course, you don't have to bear these costs. You can let the children and grandchildren come to you and can spend more time in public libraries than on golf courses. But the early years of retirement, in particular, are when folks tend to have significant energy and lots of plans.
Unfortunately, many expenses in retirement are not so discretionary.
Health care, for example, can take a huge bite out of your nest egg. Fidelity Investments recently estimated that a 65-year-old couple retiring today can expect to pay, on average, about $230,000 on health care. That's just an average, so you might spend far less -- but you could also spend much more.
Medicare probably won't provide sufficient coverage, so you might need to buy supplemental insurance, which isn't usually cheap.
Meanwhile, though a lower income level will probably mean your income taxes will decrease, you'll still be on the hook for property taxes. And those will probably keep growing over time. If your annual property tax is $3,000 and it grows at 3% each year, it will hit $5,400 in 20 years.
Your home insurance costs will rise, too, along with your car insurance premiums, the cost of heating and cooling your home, groceries, and most other items.
And finally, whereas you might expect retirement to be a time when you're no longer raising children and supporting those dependents, you might still find yourself occasionally -- or routinely -- helping your loved ones out financially.
Still, the news isn't all bad. While you might spend more than you expected to once you retire, you probably won't keep it up. As we move into and then out of our 70s, people tend to slow down and be less active. Less travel, less eating out, and fewer hobbies can mean lower spending.
Throughout most of our retirement, we'll enjoy discounts on various expenses, too, such as movie tickets, meals, and even property taxes.
What to do
Don't let your retirement plan end up designed by assumptions you never questioned. Take some time to map out what your expenses may be in retirement, and to make sure you're saving, investing, and accumulating enough to support them.
Another possibility is working part-time through part of your retirement, which can add income and possibly some useful benefits as well. It also keeps many retirees happier, giving them a social setting to belong to. Downsizing to a smaller home or moving to a less costly town or region can also make a difference.
Spend some time planning now, and you'll thank yourself later.