By YOUNG MONEY Staff
24 September 2010

Members of defined-contribution plans under the age of 40 contributed less to their plans in 2009 than they had in 2008, Financial Engines chief investment officer Christopher L. Jones said at a money-management conference this week.

Financial Engines provides retirement advice and account management services on behalf of 401(k) plans around the nation. Thus, the company is apprised of what's going on in retirement planning - and according to Jones, it isn't pretty. Fully three-quarters of DC plan participants aren't going to have enough to get by on in retirement, the executive said at the national conference of the Profit Sharing/401(k) Council of America.

And two-thirds of the country's 401(k)s are either poorly allocated or fail to take risk management into account, Pensions & Investments magazine quotes Jones as saying.

It's especially troubling that younger workers contributed less in 2009 than they had in 2008; young people should try to contribute as much as they can to their retirement portfolios. But young workers do have one advantage: time. The money they sock away now can compound over many years - so even a small amount can grow large over the next several decades.