These days, very few people get guaranteed pensions and they are almost always 401ks instead.
If you are running a business, isn’t it cheaper to provide pensions? You can invest the money in the same sort of funds that a 401k is invested in, but money not paid out (say, both retiree and spouse die) can be pocketed where 401k goes to whoever is a beneficiary like kids, extended family, charities, pets, etc).
In: Economics
Wall Street didn’t like people to have a guaranteed monthly income. So they invented the 401k, which is a less stable retirement account. That is subject to the ups and downs of the stock market. Which can decrease in value during a downturn in the stock market. That’s why there are less companies that have pension plans.
Latest Answers