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RISMEDIA, April 13, 2010—(MCT)—When it comes to saving for retirement and building a portfolio to last a lifetime, most Americans are way behind the eight-ball.

More than 54% of Americans report that the total value of their household’s savings and investments, excluding the value of their primary home and any defined-benefit plans, is less than $25,000, according to the Employee Benefit Research Institute’s annual Retirement Confidence survey. What’s worse, 27% have less than $1,000 in assets. Just 11% have more than $250,000 set aside.

Yes, those figures include Americans young and old, those just starting in the work world as well as those about to check out, but in the main, many Americans need to modify their savings and spending patterns to have any hope of enjoying a standard of living to which, rightly or wrongly, they’ve become accustomed.

And it’s not rocket science—at least, according to some experts. Here are some nest egg do’s and don’ts, according to Hewitt Associates and Merrill Lynch.

1. Participate in your plan.
If you’re lucky enough to have a 401k at work, contribute to it. That will greatly improve your financial well-being, according to Bank of America Merrill Lynch, which recently introduced a new tool designed to monitor and score the “financial wellness” of 401k plans in general and, by extension, the employees who participate in them.

The new tool looks at four plan-participant behaviors, including saving, investing, setting and monitoring retirement goals, and nest-egg preservation. Not surprisingly, savings and investing behavior—which represent 80% of the overall score—are the primary drivers of financial wellness.

According to Kevin Crain of Merrill, the healthiest 401k plans (at least among Merrill clients) are those where 80% of the eligible employees are participating in the plan. The least healthy are those where 70% of eligible employees participate. In addition, he said the healthiest 401k plans also have automatic enrollment, where eligible employees are automatically enrolled in the 401k plan; automatic increases, where the percent of salary employees contribute to the 401k plan is automatically adjusted upwards on a regular basis; and investment advice provided to workers.

2. Avoid risky behavior.
In Merrill’s new index, participants can receive a wellness score on a scale of 0 to 10, with 10 being a perfect score. Points are deducted from the overall wellness score of each participant based on symptoms associated with “at risk” behaviors.

What are those risky behaviors for which you might get dinged? Having an outstanding loan that represents 25% or more of your total 401k account balance; not having requested a proposed investment strategy; not using asset-allocation or target-date funds; concentrating in specific asset classes; concentrating in company stock; not taking full advantage of the company match; saving 2% or less; and not saving at all. These behaviors each cost you at least one point off the overall score.

3. Increase your contribution rate.
If you are participating in your 401k, consider upping the percentage of your salary that you contribute. Workers contribute on average 7% of their salary to a 401k, but every little bit matters.

Crain reports that workers with the healthiest 401k plans contribute 8.5% on average to their accounts while workers with the least healthy plans contribute just 6.5% on average. For its part, Hewitt noted in a release that contributing just 1-2% more of your salary to your 401k can have a dramatic effect on your retirement savings.

4. Put your plan on autopilot.
When it comes to saving, inertia often gets the better of us. If you contribute 6% to your 401k, it’s likely to stay that way even if you get a raise. But you should consider taking advantage of any and all tools that take the guesswork out of saving and investing. Consider signing up for automatic escalation and automatic rebalancing tools if your employer offers such options.

5. Take advantage of advice.
The median annual return for employees using investment help was almost 2% higher than those who did not, according to a joint study from Hewitt Associates and Financial Engines.

Crain is in agreement about the benefits of advice. In Merrill’s world, 401k plans that offered advice to participants had a higher “wellness” score than those that didn’t offer advice, 8.5 to 6.2.

According to Hewitt, one in every two firms in its survey currently offers online investment guidance, and 39% offer online, third-party investment advisory services. In addition, 28% of employers currently offer managed accounts that let participants delegate management of their account to an outside professional.

6. Don’t forfeit free money.
It’s hard to believe, but more than one-in-four workers leave free money on the table by contributing below the company-match threshold. Contribute enough to your 401k to receive your full employer match.

More companies are restoring their company match. Hewitt research shows that 80% of employers that reduced or suspended their match in 2009 plan to restore it in 2010.

7. Don’t cash out.
If you’re changing jobs or leaving your current job, don’t cash out your 401k savings. About 46% of employees cash out, according to Hewitt. But doing so can have serious consequences. Typically, you’ll play a tax on the amount withdrawn and a 10% early withdrawal fee.

8. Don’t over-invest in company stock.
In Merrill’s Financial Wellness index, you lose points for over-investing in company stock, because doing so means that both your human capital and financial capital are tied to your employer. And if your employer goes belly-up— you lose your job and a good portion of your 401k.

According to Hewitt, employees contributed on average 18% of their 401k money to company stock in February. Hewitt recommends contributing no more than 10% of your 401k to your employer’s stock.

(c) 2010, MarketWatch.com Inc.

Distributed by McClatchy-Tribune Information Services.