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They would save money themselves? I thought America is all about personal responsibility and independence and such? They can use 401k just like the private sect
by cylinder 10y ago
They would save money themselves? I thought America is all about personal responsibility and independence and such? They can use 401k just like the private sector.
- chrisseaton 10y agoBut a private 401k is just another type of pension. The people I was replying to were saying that pensions, in general, so of all types, were a bad idea.
- cylinder 10y agoMany pensions in the US promised guaranteed payments in retirement that they cannot now meet in low interest rate environments. This is one of the core issues with pensions in the US. Also, pensions are not controlled by the individual. The money is pooled and managed by the pension fund. This is of course subject to corruption and bloated fees as we have seen. The 401k program is not perfect, and in fact needs to be totally reformed, but they at least offer more choice and competition and do not promise guaranteed returns.
- dragonwriter 10y agoPensions are defined benefit, 401k is defined contribution. They are both retirement vehicles, but distinctly different, particularly in terms of risk.