The 401(k) retirement plan will be playing a greater part in our workaday and after-work lives, but only if we use it to its fullest and don't abuse it.

With each passing year, as more and more people retire, the role of our personal savings, including our 401(k) savings, increases and increases. We are becoming more dependent on our own use of retirement savings vehicles, of which the 401(k) is the most common. We are becoming more self-sufficient in retirement.

How you use and how you don't use your 401(k) will determine the kind of retirement you have. It's that simple.

Unfortunately, many 401(k) participants are underusing their 401(k)s. These underusers will have to work longer or live a restricted retirement. In 2004, the median household 401(k) account was only $60,000 for a head of household ages 55 to 64, based on a Federal Reserve study.

A later Investment Company Institute survey found workers in their 60s averaged only $157,000 in their 401(k)s. These participants are not taking full advantage of these self-directed plans.

Fortunately the federal government recognized that workers are poor investors and that the pending retirement-income shortfall will place a serious burden on public funds in the decades ahead. To help remedy this situation, the Pension Protection Act of 2006 gives employers and 401(k) plan sponsors the authority to automatically enroll eligible participants and make prudent investment choices for the participants.

Since many employees are not fully using their 401(k) plans, employers can now act for their employees' benefit. And employers are underusing their 401(k)s if they don't update their plans and fully exercise their new authority in increasing participation and in placing employees in appropriate investments. If you are an employer offering a 401(k), make sure you have your plan documents updated to include the new provisions.

Underuse by employees and by employer-sponsors is no less serious than the inappropriate use of 401(k) funds. As an adviser and fiduciary, I strongly object to 401(k) plans that allow participants to withdraw money prematurely (before the retirement for which they are intended) for nonhardship situations.