John Bradley, a financial planner, and expert with Capital City Financial Partners, says pensions are not as popular as they used to be. Back in the day, people who had a pension and social security didn’t necessarily need to save as much money for retirement as people do now. A pension plan is usually contributed by your company 100%. Whenever someone with a pension retires, they have a promise to be paid by the company. With a 401k, the individual has to contribute to it. The company you work for will write you a match, but you must contribute a certain amount for that match. You can predict what you will get paid through your pension for the rest of your life, but with your 401k, that is a little more difficult to predict because of the rate of returns on your investments.
You are here: / / Identifying the differences in a 401(k) and pension and which is right for you