Scrambled Nest Eggs

Pensions vs. 401(k)s: What’s the difference? A quick primer.

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since 1975, companies have gone from contributing more than 90 percent of their workers’ retirement funds to pitching in less than half. How? Mostly by switching from “defined benefit” pension plans to 401(k) and similar “defined contribution” accounts. In such a shift, employees typically lose about one-third of their benefits. Some other key differences:

Pension vs 401(k)

Company assumes risk of investing

In addition to wages

Benefit depends on your salary, work history

Guaranteed by federal government

Employer pays fees and expenses

Company must contribute unless plan shut down

Employee assumes risk

Taken out of wages

Benefit depends on stock market

No guarantee

Employee pays

Company can suspend contributions
at will

 

1983 vs 2007

Percentage of workers with retirement plans who had:

Scrambled Nest Eggs Pie Charts

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And the truth is, going into the final 4 days of the year we still needed to raise $TK to hit our $350,000 goal and start 2021 on track. It's nerve-wracking, wondering if the big spike we normally see at the end of December is going to be another thing that doesn't go as planned in 2020, or worse, if, now that Donald Trump is set to leave the White House (for longer than a taxpayer-funded golf trip to a property he owns), folks might be pulling back from fighting for the truth and a democracy and think the hard work is done.

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