In part 1, we discuss some of the benefits of making salary-deferral contributions to an employer sponsored plan. While many of us will agree that making these contributions is a smart financial decision, some people still need convincing because they see some drawbacks outweighing the potential benefits. Let's look at some of these barriers and ways to overcome them.

"I need my money now - I can't afford to defer my income."
Let's face it, for many of us, making ends meet is a struggle, and if we live from paycheck to paycheck, the last thing on our minds is worrying about bills 40 years in the future. But as any retiree will tell you, retirement is not that far away.

While it may seem impossible to get by on less than what you are spending today, consider the opportunity cost of saving now. It might be a fairly small cost for its potential benefits: at retirement, you could be financially independent, free from having to depend on financial assistance from the government, relatives, and other sources over which you have little or no control. Furthermore, saving for your retirement may not be as unaffordable as you think. Consider the following questions:

• Have you recently given up (or considered giving up) a habit such as smoking, buying lunch everyday, or treating yourself to lattes? If so, tally the daily cost of these expensive habits. These funds could be diverted towards your retirement savings.
• Have you recently received a raise? Your cost of living may have also increased, but check to see whether your increased income exceeds your increased expenses. If this is the case, treat the extra amount as income that you haven't received in the first place and use it to fund your retirement nest egg.
• Is there anything you can afford to give up? For example, how often do you dine out with your family? Reducing the number of occasions you splurge on non-essentials can leave you with a tidy sum of disposable income, which you can use to fund your retirement account.
• Other options include implementing conservation measures around the house to reduce utility related expenses and changing your driving habits to reduce wear and tear and fuel costs for your vehicle. You will undoubtedly be able to come up with additional money saving ideas of your own.

"If my money is in a retirement account, I can't access it when I want to."
There may be occasions when you experience financial hardship and your retirement account is your only source of savings. In such a situation, it can be quite frustrating to be unable to withdraw from the account as you please. But it is important to remember that these rules are implemented to help ensure that your retirement assets are not withdrawn for other purposes. However, some qualified plans take into consideration that it's possible for their participants to suffer immediate financial hardships, and include provisions that allow participants to access their assets prior to retirement. These provisions include the following:

• In-service withdrawals - Generally, plan participants must satisfy certain requirements in order to receive a withdrawal from their retirement accounts. Among other things, these include reaching retirement age, ceasing to work for the employer, or becoming disabled. Under a profit sharing or 401(k) plan, an employer may include a provision that allows participants to make withdrawals without satisfying these requirements. Some plans limit these withdrawals to hardship situations - which could include paying rent or mortgage to prevent eviction or covering expenses for health care and higher education.
• Loans - Many qualified plans include loan provisions, which allow a participant to borrow up to 50% or $50,000 (whichever is less) of his or her vested account balance. Check with your employer to determine the features and benefits that apply to your retirement plan.