American workers are in a bind.

The pensions that served their parents andgrandparents so well are largely defunct.

Even people who have worked all their lives and contributed to adefined benefit plan, whether public orprivate, are learning now of massive funding shortfalls that could mean little, ifany, retirement income now that they’re close to exiting theworkplace.

A Kiplinger report says that not only are employersfreezing what pension plans they had, shutting out new workers,they’re offering lump-sum payouts in place of what was supposed tobe a nice, steady income stream.

And employers who failed to make sufficient pensioncontributions, or who indulged in riskier investments in the hopeof boosting plan balances, are putting employees between a rock anda hard place as plans come up short.

Other problems that provided a double whammy to pensions includea longer lifespan for workers after retirement (although that trendappears to be reversing itself) and way lower interest rateson retirement savings (although that too might be turning, as theFed contemplates additional rate hikes that will weigh heavily ondebt, thus further endangering workers’ ability to retire).

That interest rate issue is a real double-edged sword, what withlow rates tempting investors to try their hand at higher-riskstocks than is prudent.

So what’s a worker to do?

For starters, don’t expect much from your pension—in fact, giveserious thought to how you’d cope if it went south and you ended upwith a lot less than you expected—or, in a worst-case scenario,nothing at all.

Where can you find alternate sources of income duringretirement? How much will your Social Security be? What can you doto improve the odds of coming through retirement with enough of afinancial cushion not to end up eating cat food?

Next, make a Plan B, says the report. Stuff that 401(k) or IRAfor all you’re worth and then some.

Make catch-up contributions, if you’re old enough, and if you’renot, or you’re worried about taxes in retirement when you finallystart to make withdrawals, open a Roth and stuff that, too.

Then you could consider a deferred annuity. There are a lot ofmoving parts to making an annuity part of your retirement plan, soyou need to consider carefully before you take the plunge.

While they can be handy, providing a regular stream of income aswell as the possibility of a death benefit, they can also eat upyour returns in fees and cost you in other ways—penalties come tomind.

Life insurance can offer some strategies, too, for your Plan B,with indexed universal life policies that can provide guaranteedtax-advantaged lifetime income in retirement through loanprovisions, as well as a traditional death benefit.

But again, they’re not something to be dealt with lightly.

Last but not least, you need to consider the ramifications of alump-sum payout on your pension, if you’re confronted with thatchoice.

Get advice—good advice—on all the pros and cons beforeyou decide.