Why a 401(k) is Better Than a Pension

Why a 401(k) is Better Than a Pension

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[barttfisher]

The concept of mini-retirement changed everything for me. I'm no longer waiting for some retirement paradise when I'm 65. It helps to know how to fund the lifestyle. You know, making money while you sip that piña colada by the beach does help. I wouldn't have been able to do it otherwise.

[edward.abraham]

It's recommended to save at least 15% of your income in a 401k. You can use online calculators to estimate how much you should save based on your age and income. Saving at least 15% of your income in a 401(k) can help ensure that you have enough money to retire comfortably. By saving this much, you can take advantage of compound interest and potentially grow your retirement savings over time.

[Lourd-Bab]

Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got to talking about investment and money. I started investing with $150k and in the first 2 months, my portfolio was reading $274, 800. Crazy right!, I decided to reinvest my profit and get more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family.

[Mav]

No way, my military pension always goes up with inflation, and never runs out.

[dr.bradshaw]

My friend retired a few years ago from UPS. He has received a pension for about $3500 a month, but told me that during his 30 years at UPS, he always pretended like the pension would never happen or existed, and invested aggressively in 401, and Roth. Now fast forward to now and he has both benefits. He’s doing amazingly.

[tightywhitey]

The fact of the matter is that “typical” blue collar Americans working for lower to middle class wages were able to retire on a pension and live comfortably until they died. Nowadays the same level workers don’t have enough money to aggressively contribute to a 401k and ultimately retire with very little. The fact that 401k has made more millionaires than a pension is irrelevant. Not everyone cares to be a millionaire, they just want to retire knowing they are secure financially.

[johnsradios]

They did away with the pension plan because it’s cheaper for the employer in the long run. Let’s not kid anyone one here. The typical American is retiring with very little retirement money. I did both. I got a pension and started a 401k too.

[michaelambrose]

Bunch of crap. My pension pays me $90, 000 a year. My pension fund is over $400, 000, 000, 000. I contributed about $235, 000 towards my pension during my 30+ career. If I die first my wife still receives 65% of my pension. On top of that our combined benefit is $50, 000 a year from Social Security. I retired at 62 and have been collecting my pension and Social Security for 10 years. If I had contributed the $235, 000 to a 401(k) I would not ever get the same benefit as I do today. Just a plug for private companies who don't want to give their employees a pension.

[rainyriderr]

The issue with 401k's is nobody knows how long they'll live. Youre getting a fixed amount of income but who knows how long you'll be retired.

[paulm]

The problem with 401k is a person needs to have discipline. With pension everyone was getting a retirement payment. Now it is only for those that make enough money to afford to put money aside. This guy speaks from a position of not having to live paycheck to paycheck.

[untouchablex]

I have a 501k. The pocket in my Levi's are empty.

[Aziz__]

Investing in Roth IRA can be a good choice since they are funded with after tax dollars, your contributions can grow tax-free over time. When you withdraw money from your Roth IRA in retirement, you won’t have to pay tax on it, which will help you keep more of your hard-earned money. Compounding is the process of earning interest on your initial investment, as well as on the interest that investment earns. This means that over time, your investment can grow exponentially. So the earlier you start investing, the more time your investment has to grow through compounding.

[myriadcorp]

Defined benefit pension is better than a 401k. Most people cannot afford to pay into a 401k. On the other hand a pension is funded by paying into it throughout your career. If I live to 80 my pension would pay me over 2 million. Go read the Economic policy institute's article on how 401k's failed most workers. 401k's are good if you are rich enough to max them out. Very few people can do that.

[PissingMeOFF]

Pensions are way better than 401k, I have both. Most pension plans employer match is way higher, and they don't count against your social security. The reason most companies stopped the pensions was because they wanted to cheap out.

[cw]

I’m one of the few fortunate people with still a pension and 401k.

[chillycharles]

My dad contributed 50k to his pension plan and lived long enough to be paid out over 800k or 60k annually. He was ok not being a millionaire.

[ii]

I don't buy it. Taking away the pension was taking away a benefit. Why not have the pension and also allow people to save in a 401K?

The main difference between a 401K and a pension is living your life in fear of having enough for retirement vs not worrying about it. How many people save every dime, don't enjoy life fully and die rich out of fear this causes?

[walterhoward]

The pension might not make millionaires, but it has provided a comfortable retirement for more people.

[Christfollower]

Military/Federal Employee here; I have two pensions, and a 401k and Roth. I've been contributing 10%

[sergiohernandez-fzxx]

UPS has one of the best pensions better than the police