401k & Pension Plans: What's the Difference?

This video is part of Riiv's Education Series. I talked to Certified Financial Planner Matt Frankel about the difference between a 401k and a pension. The discussion covers not only what's more common today, but why pensions are so hard to come by. Follow Matt's channel @MattFrankelCFP for more great topics like this.

Travis Hoium does not have a position in any company mentioned.

A portion of this video is sponsored by The Motley Fool.

[SexyStang]

Pensions today are usually state or gov jobs, so very safe, and a good deal.

[LiamOlivia-]

I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for...

[guillermorivas]

Most jobs nowadays that have pensions are government jobs -- I would say around 40% of them do. And most government jobs also offer 457 plans that are like a traditional 401k plan as well as a Roth 401k plan. Few private sector jobs offer pensions like Coca Cola, AAA, Pepsi, etc.

[jiggeplaya]

I have a pension with my company, not government. I will have the option to have monthly payments or lump sum option. Growing up the big thing was to become a white collar worker, which was not for me. I attended trade school after the military then down the road college after becoming a utility worker. I am extremely happy with my decision making and fortunate with my retirement.

[roxanneeverett]

Any thoughts on a county pension plan?

[petermusto]

I feel blessed to have worked for the Federal Government. After over 33 years, I recieved a lifetime Pension with a yearly cost of living increase. It came with Health Insurance and Dental Insurance. I also received a 401K ( TSP). And full Social security which I waited to receive at 66 and 2 months.
As a kid, my Grandfather told me to get either a State or Federal job. I'm glad I listened, and I'm grateful for God's kindness.

[D-Harb]

If a Union is contributing 1.75% to our pension plan, is that low? Do 401K's pay monthly after you retire or do you get one lump sum. You guys need to show numbers with examples... For instance, if you are contributing $5-8/hour to your Pension for x amount of years.. Compare to you contributing 5-8% of your check to your 401k for the same amount of years.

[Slimnbonez]

I currently have a defined benefit pension and was fully vested after 5 years, it’s so ol skool I have trouble finding any information to truly help me understand it

[gamanima]

I’m retiring in 7yrs I have a job with a pension. If I retired to day I would get 6k a month. By the time I retire I could get it up to 7or 8K. I’ll be 58 yrs old at time of retirement.

[renagadebilly]

Wow … sounds like a pension is the way to go.

[danielmagallan]

Have been contributing to a 401k since I started with the company in 2013. Still with the same company, but am now in a new role. This new role, different union is also offering me a pension. Would it be wise to contribute to both or just continue to contribute to my 401k? Thanks.