In the past, workers like your parents and grandparents could count on their employers helping to take care of their financial needs after they retired. Now, though, companies have largely abandoned taking responsibility for their workers' retirement -- so if you don't want to work for the rest of your life, you're going to have to figure out how to fend for yourself.

Unfortunately, that's easier said than done, especially for the millions of workers who know next to nothing about investing. Even if you resign yourself to the fact that you'll need to save and build your retirement nest egg on your own, how do you figure out what tools you can use to get the job done?

Changing of the guard
Most workers in previous generations had a vastly simpler career path, working for a single employer throughout their careers. With workers making such a huge commitment, employers had more incentive to return the favor, ensuring that retirees and their families would have enough supplemental income beyond Social Security benefits to meet at least their basic needs for the rest of their lives.

More recently, though, the bond between workers and employers weakened. Nowadays, it's extremely rare for a worker to stay in a single job for a lifetime -- most people can expect to change jobs several times.

In turn, that weaker relationship threw a wrench into the pension model. Benefits that made sense for 30-year career workers didn't translate well for those who switched jobs frequently. That set in motion a downward spiral in benefits:

  • Many companies, such as IBM (NYSE:IBM), Verizon (NYSE:VZ), and Hewlett-Packard (NYSE:HPQ), started to freeze existing pension plans, replacing them with 401(k) and other defined contribution plans that put more of the responsibility on workers to invest their own money.
  • However, companies that switched to 401(k) models initially added benefits like profit sharing and matching contributions. It’s only in the past year or so that a rash of companies, including FedEx (NYSE:FDX), Starbucks (NASDAQ:SBUX), and Sears Holdings (NASDAQ:SHLD), suspended -- or began thinking about suspending -- matching contributions to 401(k)s.

Now, the situation is more dire than ever. A third of all employers have reduced or suspended matching contributions since the beginning of 2008, and nearly 30% more plan to do so in the next 12 months. In the end, unless workers demand better retirement options, you're likely to see employers' role in retirement planning disappear entirely.

What to do
Because of these challenges, it's more important than ever for you to get an early start with your retirement planning. Here's a simple five-step plan to get you started:

1. Figure out your needs. Take a hard look at your budget and decide how much you'd expect to spend if you weren't working. Then plan for a 30-year retirement -- which isn't ridiculous, given increased life expectancies -- by using a retirement calculator to crunch the numbers and determine how big a nest egg you'll need.

2. Decide on a savings goal. Make some reasonable assumptions about returns on your investments, and calculate how much you'll need to set aside every month to reach your retirement goals.

3. Save smart. Take advantage of all the tools at your disposal, including your 401(k), IRA accounts, and lower tax rates on capital gains and stock dividends. Don't pay outrageous fees to invest, and watch out for taxes and inflation. If you're intimidated by all the investment choices you have, even an index ETF like the SPDR Trust (NYSE:SPY) can give you great results without unnecessary complexity.

4. Challenge yourself. As you advance in your career and earn more, try to save more as well. That way, you'll build a cushion that will either give you more to spend after you retire or allow you to absorb blows like the one stocks took in 2008.

5. Stay on top of it. The past year has reminded everyone that you can't let your investments go on autopilot. As you approach your goals, adjust your risk levels appropriately so you won't jeopardize all your hard work.

Taking sole responsibility for your own retirement may not be the simplest thing in the world to do. But with less help from employers than ever, it's definitely something you won't want to put off doing. If you follow these simple steps, you'll be on the right path to a happy retirement.

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Frustrated with your 401(k)? Even if your employer's plan isn't the greatest, you don't have to give up your dreams of a happy retirement. Get the tips you need to turn your retirement savings around in our special report, "How to Make the Most of Your 401(k)" -- just click here for instant free access.

Fool contributor Dan Caplinger loves planning his own retirement. He owns shares of Starbucks and SPDRs. Starbucks and Sears Holdings are Motley Fool Inside Value picks. FedEx and Starbucks are Motley Fool Stock Advisor recommendations. The Fool owns shares of Starbucks. Try any of our Foolish newsletters today, free for 30 days. The Fool's disclosure policy makes you bulletproof.