Personal Financial Management is a topic that is growing in complexity. It seems like more financial and insurance investment products are available every day.

We really don't know what benefits may or may not be available to us in the U.S. from government programs in the future. So it's not wise to count on those programs for future income in whole or probably even in part.

Many people are simply unprepared and uneducated about how to implement long-term investment plans for their future. It's critical that everyone have at least a basic understanding about how to accumulate and preserve personal wealth.

Financial Management is a very broad topic, but I'll focus on the two major types of retirement plans that may be available to many of us in the workplace. I want to explain the two types and encourage you to participate in them if you aren't doing so already.

The first is called a Defined Benefit Pension Plan and the second is called a Defined Contribution Plan.

A Defined Benefit Pension Plan gives the participant a specific monthly benefit at retirement. It could be an exact dollar amount or it could be calculated using a formula that considers the retired employee's salary and length of employment with the company.

The important thing to remember about a Defined Benefit Pension is that the investment decisions are made 100% by the employer on behalf of the employee. The employee doesn't have to save a dime out of their paycheck or even think about how to best invest this money, because they never see it.

For a Defined Benefit Pension, the employer takes all risk and responsibility to make sure that they'll be able to fully pay all retired employees who qualify for the benefit. They use the services of an Actuary to make complicated calculations that forecast their future income needs for all employees who are likely to qualify for retirement benefits.

The catch is that the length of service to qualify for Defined Benefit Pensions is usually very long. If an employee leaves the company prior to the required length of service, they lose this valuable benefit. Fewer and fewer employers offer Defined Benefit Pensions because they're very costly.

If you have a Defined Benefit Pension Plan with your company, consider yourself fortunate!

The second and most common type of retirement plan is the Defined Contribution Plan. These provide an individual account for each participant. You may know these as 401(k)s or 403(b)s, for example.

A 401(k) plan allows an employee to have their employer contribute a portion of his or her cash wages to the plan on a pre–tax basis.

A 403(b) plan, also known as a tax-sheltered annuity (TSA) plan, is a retirement plan for certain employees of public schools, tax-exempt organizations, and clergy.

The benefits are determined by the amount an employee chooses to contribute, up to a yearly maximum set by the IRS. For 2007 the maximum contribution to a 401(k) is $15,500. Participants have a certain degree of control over the investment choices and can conveniently fund them through payroll deductions.

Many employers who offer a 401(k) to their employees also throw in an added bonus to encourage investment. They'll match a set portion of the employee's yearly investment. If you leave the company, you can take your 401(k) money with you and "roll it over" into a new plan.

Understand that the portion of money that was given to you from the employer in the form of matching usually has a vesting schedule tied to it. So this means you may forfeit all or a portion of those matched funds depending on how long you were with the company.

However, there are some 401(k)s, with what's called Safe Harbor plans, that allow for full vesting of all employer contributions. If your employer has a Safe Harbor 401(k), you get to take 100% of your matched money with you if you leave the company.

If you have the option to invest in a 401(k) or 403(b), don't take it for granted. Make sure to at least invest enough money each year to optimize the employer's match to you.

If you own or manage a small business, putting a 401(k) in place may not be as expensive as you think. The one-time activation fee and annual administration fees can be as little as a total of $1,500 per year.

Over time, there has been a shift from Defined Benefit Pension Plans to Defined Contribution Plans in the workplace. This shift has resulted in a big challenge for many average people because the result is a transfer of risk and responsibility for creating retirement income from the employer down to the individual worker.

Never procrastinate investing for your future because you think you don't have enough to invest right now. You can't think that you'll invest once you get that promotion or land that big account.

You'll come out ahead if you invest a little bit on a regular basis right now rather than waiting to invest a larger amount in the future. When it comes to Personal Financial Management, time is of the essence. So, the biggest secret to building wealth is simple: to get ahead, get started!