Beginning July 16, 2011, the Department of Labor will require plan providers to disclose fees that are deducted from a participating employee’s retirement account. It will then be possible for employers to see a written disclosure of all of the services that are being provided by the plan provider or its affiliates, and how much each service costs. And then the next logical step will be legislation to make that information available to individual employees. If that happens, you will be able to see the cost for various funds or investment options as well as other information you can use to make investment decisions.

This will be an important step because fees can add up over time and they can take a big bite out of your profits. According to the Vanguard Group, a 60-year-old investor with a $500,000 portfolio and a fund expense ratio of 1.19%, the industry average, would pay $6,055 in expenses this year. In contrast, someone with an expense ratio of 0.23% would only pay $1,170 in fees. Warning: While fees are certainly important because of the impact they can have on your returns, resist the urge to make decisions based on fees alone. They are just one factor in developing a retirement investment strategy and they should not be your only consideration.

So what should you consider when choosing investments for your retirement? Here are three basic strategies to get you started:

1. Develop a retirement plan – one that focuses on what you want your retirement to look and feel like. At a minimum, you need to know how much money you will need to live the lifestyle you want in retirement, how much money will be coming in, and any gaps you need to fill with your personal investments.
2. Aim for a diversified portfolio. Allocate your investments among asset categories and sub-categories based on your goals, your risk tolerance level, and your time horizon.
3. When choosing individual investments, look for asset categories that fit those outlined in your asset allocation plan (#2 above), investments that have a long track record so you have an idea of how they might perform in different markets, and oh yes, the best ones in each category with the lowest fees.

P.S. Want more investment tips and strategies? Join Wise, Wealthy Women live at the Investing 101 workshop in Atlanta on August 21^st. For more information visit www.WiseWealthyWomen.com.

For more on planning and investing for retirement, check out Retiring Rich each week at BlackEnterprise.com.

But, offering a retirement package can help attract talent, which is crucial to business success. “Any time an employer adds to a benefits package, it’s definitely going to help with retention,” says Isaiah McGee, an employer consultant in Waukee, Iowa. “It shows the company values its employees.”

Fortunately, SEP-IRAs and even 401(k) retirement plans can be cost-effective options for employers.  Here’s what entrepreneurs need to know about them:

SEP-IRAs
A Simplified Employee Pension Individual Retirement Account, or SEP-IRA, is an arrangement where an employer of any size, including a self-employed individual, can make contributions for their eligible employees.

A major advantage of SEP-IRAs is that employers can adjust contributions based on the success of their business. If the company is having a slow sales year, employers can contribute a smaller (or zero) amount into their employee’s accounts. If the company has a better year, employers can give a larger contribution. Employers can generally contribute up to 25% of the employee’s compensation (with a maximum of $46,000 in 2008, subject to certain IRS conditions). Fairness is required–the contribution percentage must be the same for all workers. Also, employees don’t contribute, only employers can.

To establish a SEP-IRA, contact your preferred bank, insurance company, or other qualified financial institution. Enrollment requirements are minimal.  “There’s a form you complete (with tax information for the business and employees) that you submit.  The process takes maybe half an hour,” says Brooke Stephens, author of Wealth Happens One Day at a Time. Along with employer contributions, administration fees are typically less than $100 annually. For more information on SEP-IRAs, download Publication 560 at IRS.gov.

401(k) Plans
Employer sponsored 401(k) retirement savings plans are popular with large companies, but small businesses and solo entrepreneurs can also take advantage of them. Workers contribute to the plan from their own compensation, and the employer can choose whether or not to add matching contributions. Companies can offer a tax-deferred 401(k) and even a Roth 401(k). The latter lets employees save after-tax funds without maximum income limitations.

These plans generally have higher start-up administration costs (from around $100 to $400) and ongoing expenses (from around $10 to $250 per year), but when compared with SEP-IRAs, participants are usually allowed to shelter more money at lower income levels.

“There are incentives in place to help small businesses start a 401(k),” says Stuart Robinson, general manager of ING Direct’s Sharebuilder 401(k) program. “The government allows for (up to) a $500 tax credit, if it’s the first 401(k) plan for your business, for the first three years of the plan.” See Publication 560 for details and restrictions.

What asset are those 30-somethings overlooking? Their youth. The more years you invest prior to retirement, the more time you have to profit from the earnings on your investments. “If you assume a 9% annual return,” says Long, “saving $10,000 at age 32 is the same as saving $20,000 at age 40.”

Ed Fulbright, a financial consultant in Durham, North Carolina, says that your 30s are “a great time to implement a ’10/10/30′ strategy. If you save at least 10% of your income and earn 10% on your investments, you will be financially independent in 30 years or less.”

Of course, no one can be sure of earning 10% annualized returns over 30 years. If you want to be in that neighborhood, you should do most of your investing in stocks and stock funds while you’re in your 30s. Historically, long-term returns in stocks have been slightly over 10%.

Long says that people in their 30s generally should have at least 80% of their retirement investments in equities. “In stocks, you have the short-term risk of seeing your holdings fall 20%, 25%, or more,” he says. “However, if you invest too little in stocks you have the long-term risk of not accumulating enough money.”

Deborah Jordan, a financial planner with Ameriprise Financial in Williamsville, New York, says that a moderately aggressive investor might hold around 70% in equities. “People in their 30s with strong risk tolerance might have 70% to 80% in stocks,” says Fulbright. “However, most of them prefer to have closer to 60% in stocks, which will provide lower volatility.”

According to Long, a young investor with 80% to 85% in stocks is likely to accumulate twice as much money as someone with only 50% in stocks. As we’ve seen, however, stock markets can provide some nail-biting days, weeks, and even years.

The key to a successful long-term retirement plan is to keep investing in stocks or stock funds, good times or bad. This process, known as dollar cost averaging, allows you to buy when stocks are low as well as when they’re high, boosting your eventual return. Contributing to a 401(k) plan via paycheck withholding is an easy way to become a disciplined investor.

Even if you can’t maximize contributions to a 401(k) plan (in 2008, the ceiling for people in their 30s is $15,500), you should contribute at least enough to get any employer match. A 50% matching contribution, for example, enables you to earn 50% on your investment, risk-free.

What’s more, contributing just enough to get an employer match can provide an ample nest egg. “Take someone who is 30 years old with $10,000 in her 401(k),” Jordan says. “Say she contributes $250 a month-$3,000 a year-and gets a 50% employer match, for another $1,500. Say she earns 8% a year inside her 401(k). By the time she’s 65, she’ll have over $1 million in the account.”

Jordan recommends diversifying your holdings as a way to reduce short-term volatility. “If you invest though funds, about half of your stock market allocation might be in funds holding large domestic companies,” she says. “For the other half, you might spread your investments among mutual funds and exchange-traded funds (ETFs) that hold international stocks, small companies, medium-sized companies, and specialty funds such as those investing in real estate.”

To Long, low-cost broad index funds make the most sense. His picks include Vanguard Total Stock Market Index Fund (VTSMX), Vanguard Total International Stock Index Fund (VGTSX), and Vanguard REIT Index Fund (VGSIX), which invests in real estate investment trusts (REITs). As an example of their low costs, VTSMX charges only 0.15% per year. If your 401(k) does not have these funds on the menu, look for what’s available in terms of low-cost funds with many holdings.

If 60% to 80% of your portfolio is in stocks, while you’re in your 30s, then 20% to 40% will be in fixed-income investments, which provide current yield and lower risk of loss. “We like laddered CDs,” Fulbright says. That is, you might put some money into a one-year bank certificate of deposit, some into a two-year CD, etc., out to five years. As each CD matures, you’d buy a new five-year CD. Fulbright also suggests Treasury Inflation-Protected Securities (TIPS) and regular bonds with maturities no longer than seven years.

While you’re diversifying your portfolio, avoid the temptation to load up on shares of your employer’s stock, no matter how wonderful the company’s prospects seem to be. “It’s too risky to have your retirement depend on just one company,” Jordan says. From Enron to Bear Stearns, recent years have produced all too many stories of employees who regretted excess exposure to company stock.