Oh interesting, where I am both of those are pensions but one is called defined benefit pension and the other a defined contribution. Mt wife has a defined benefit whereas I have contribution.
Benefit is definitelt better, knowing what you will definitely have is ideal and you can still take full advantage of a DC scheme if you want.
I think the “Pensions you don’t contribute to and the amount you get is fixed.” is a bit murky. If you have a pension that probably means you have a lower salary compared to an equivalent non pension job, because part of your labor value goes into funding the pension. But the main thing is 401(k) puts a lot of responsibility on the individual. And as this article points out, if you put a lot put retirement financial planning on the individual, that creates a larger social problem since many people can’t sufficiently do that themselves, even if they are being responsible with what they earn.
Yeah see the only different here is if the benefit is defined or the contribution is. Employers still give decently toward the DC and they manage the scheme. They have group schemes that all empkoyees are a part of and you cant leave it unless you leave the job or decide not to contribute.
I aways assumed a 401k was what americans called pensions, like gas and petrol. What is a 401K if not a pension?
They’re similar in that you use it for retirement.
But, 401ks you contribute to and the value depends on the stock market.
Pensions you don’t contribute to and the amount you get is fixed.
More here: https://www.forbes.com/advisor/retirement/pension-vs-401k/
Oh interesting, where I am both of those are pensions but one is called defined benefit pension and the other a defined contribution. Mt wife has a defined benefit whereas I have contribution.
Benefit is definitelt better, knowing what you will definitely have is ideal and you can still take full advantage of a DC scheme if you want.
I think the “Pensions you don’t contribute to and the amount you get is fixed.” is a bit murky. If you have a pension that probably means you have a lower salary compared to an equivalent non pension job, because part of your labor value goes into funding the pension. But the main thing is 401(k) puts a lot of responsibility on the individual. And as this article points out, if you put a lot put retirement financial planning on the individual, that creates a larger social problem since many people can’t sufficiently do that themselves, even if they are being responsible with what they earn.
Yeah see the only different here is if the benefit is defined or the contribution is. Employers still give decently toward the DC and they manage the scheme. They have group schemes that all empkoyees are a part of and you cant leave it unless you leave the job or decide not to contribute.
I dunno, myself. But I did find this.