If you want to be financially secure in your retirement, you can't rely on anyone but yourself. But rather than giving up in the face of a falling stock market, workers are starting to take responsibility for saving enough for their retirement.

According to Fidelity, whose retirement plan division administers 401(k) accounts covering 11.5 million participants, many workers have substantially increased their retirement contributions in 2008. Comparing employees who were covered by the same plan throughout 2007 and 2008, average contributions rose by 7% in the first six months of this year to slightly more than $3,500.

What's behind this?
Fidelity cited several possible factors for the increase:

  • Many companies that have moved away from defined benefit pension plans and toward 401(k) plans are offering incentives like matching contributions to encourage participation.
  • More workers are being automatically enrolled in 401(k) plans, ensuring that they save at least something toward retirement.
  • Baby boomers may be playing catch-up in the final years of their careers.
  • As workers get raises, the amount of money going into their plan rises, as long as they don't change their contribution percentage.

Whatever the reason, it's good to see more workers taking an active role in their retirement planning. For most employees in the private sector, the days of having a guaranteed comfortable standard of living in retirement are over. With companies like IBM (NYSE:IBM), Verizon (NYSE:VZ), and Hershey (NYSE:HSY) freezing pension plans or closing them to new workers, relying on an employer pension for your retirement is like counting on the Chicago Cubs to win the World Series this year -- it might happen, but I wouldn't bet the farm on it.

Still room for improvement
As encouraging as the Fidelity study's results are, savers could still do more. Only 9% of investors maxed out their 401(k) contributions. Granted, the 2008 maximum contribution of $15,500 for those under 50 represents a huge percentage of many workers' salaries, so it isn't surprising to see relatively few people taking full advantage of their 401(k)s. Yet even among highly compensated employees, fewer than two workers in five saved as much as they could in their retirement plans.

More importantly, contributing money to your 401(k) account is just half the battle. Once it's there, you have to invest it well. Here are a few pointers:

  • Embrace risk. Being too conservative may make you feel safer, but you'll never reach your goals at the paltry rates offered on money market funds and government bonds right now.
  • Diversify. Plenty of retirement investors put most of their money into true-blue large-cap stalwarts like Microsoft (NASDAQ:MSFT) and General Electric (NYSE:GE), hoping that they'll be more stable during rough markets than less well-known companies. Yet having a few small-company stocks in your portfolio, such as Natus Medical (NASDAQ:BABY) and Graham (NYSE:GHM), can give you greater growth prospects when stocks are generally strong.
  • Think long-term. Especially during bear markets, you'll often see the value of your investments fall below what you paid for them. Historically, stocks have sometimes performed poorly over periods of several years, yet when you consider periods of 10 to 20 years, it's tough to find a better alternative.

When stocks are doing badly, as they are right now, you may not get the positive feedback of a rising account balance that you'd like to see when you save more. In fact, the Fidelity survey shows that average account balances for retirement savers actually fell slightly from 2007 to 2008, despite thousands in additional contributions.

In saving for retirement, though, taking the long-term perspective isn't a matter of choice; it's absolutely necessary to evaluate your prospects rationally. Whether stocks are going up or down, though, saving more is a surefire way to make sure you'll hit your golden years with as big a nest egg as you can.

For more on saving for retirement, read about:

If you know you need to save more for retirement but don't know where to start, we can help. Each issue of our Rule Your Retirement newsletter service is chock-full of information you can use to put together, manage, and grow your stock portfolio. Look at everything we have to offer with a 30-day free trial

Fool contributor Dan Caplinger wants to retire rich. He owns shares of General Electric. Natus Medical is a Motley Fool Hidden Gems pick. Microsoft is an Inside Value recommendation. Try any of our Foolish newsletters today, free for 30 days. The Fool's disclosure policy doesn't care how old you are.