With so many people seeing much of their savings disappear, calls for reform throughout the financial industry have found renewed vigor. And after the revelation of the Bernie Madoff scandal, investors increasingly see Ponzi schemes lurking behind every corner, trying to draw unsuspecting innocents into their web.

Yet while 401(k) plans definitely have their flaws, the idea that they're a complete ripoff for investors is a huge exaggeration. Used correctly, your 401(k) can still be one of the most useful tools in your retirement savings arsenal to help you accumulate enough wealth to retire well.

Suffering huge losses
Obviously, many workers have seen their 401(k) balances shrink substantially over the past year. From estimates made by the Employee Benefits Research Institute, typical workers with at least 10 years of job tenure have seen losses of between 20% and 30% in their account balances since the beginning of 2008 through the end of January 2009.

Moreover, given that those estimates are more than a month old, you might have suffered even more pain from your plan account since late January. So, are 401(k)s really just a tool developed to ruin your retirement?

A conspiracy?
It's easy to create a reasonable-sounding conspiracy theory behind 401(k) plans. Back before 401(k) plans existed, many companies offered traditional pension plans to workers that would pay a certain monthly benefit for the rest of their lives after they retired. Workers didn't have to do anything to get that benefit -- rather, it was all up to employers to figure out how to invest so that they'd have enough money to pay their workers' retirement benefits.

Now, though, traditional pensions are becoming a thing of the past. Huge pension liabilities are part of the problem faced by long-time American institutions like General Motors (NYSE:GM) and Ford (NYSE:F). Several years ago, large companies like Hewlett-Packard (NYSE:HPQ) and IBM (NYSE:IBM) started freezing their traditional pension programs and encouraging 401(k) participation in their place.

More recently, though, companies have started looking at their 401(k) programs as places where they can cut costs. Many struggling employers, including Motorola (NYSE:MOT) and UPS (NYSE:UPS), have suspended or discontinued making matching contributions to 401(k) plans. With corporate profits down, the profit-sharing contributions that some employees enjoy might be the next thing to disappear. And while some employers insist that these cutbacks will be temporary, workers need to prepare to take sole responsibility for using their retirement accounts to greatest effect.

Why it's not a Ponzi scheme
Regardless of whether you believe the policy behind 401(k) plans is flawed and has merely served to help employers get the monkey of paying employee benefits off their back, you can't blame investment losses in your 401(k) account on a grand conspiracy.

In fact, you may end up better off than some with traditional pensions. Employers haven't had much better luck with their investments than workers, as companies like Northrup Grumman (NYSE:NOC) have faced massive pension shortfalls. Meanwhile, the government agency that backs up employer pensions, the Pension Benefit Guaranty Corporation, already faces a huge deficit and could see additional losses. Although the government will likely ensure that pension recipients are made whole, it could just add to the trillions spent bailing out the economy thus far.

Meanwhile, your 401(k) remains a huge and completely legal tax shelter opportunity, letting you defer tax on as much as $22,000 in 2009 if you're 50 or older. That could add up to tax savings of $7,700 for those in the highest tax bracket -- an amount you'd be hard-pressed to match with other tax-cutting techniques.

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If you need tips on how to make the most of your 401(k), you're not alone. Many subscribers to our Rule Your Retirement newsletter service started out with 401(k) questions and concerns just like yours and have found the answers they needed. Learn from our experts as well as people just like you by trying out Rule Your Retirement free of charge for 30 days.

Fool contributor Dan Caplinger has maxed out his 401(k) every chance he's gotten. He doesn't own shares of the companies mentioned in this article. UPS is a Motley Fool Income Investor pick. Try any of our Foolish newsletters today, free for 30 days. The Fool's disclosure policy has enough information to give to everyone.