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Don't pensions tends to have issues with behind underfunded? I'd rather not have risks just swept under the rug.

• kmonsen 10y ago
  No, this is your money. 401k (including matching $) is paid into an account you control. You can use it anytime, but if you do before some age (65?) there will be tax penalties.
  • Jtsummers 10y ago
    59 1/2. For Traditional 401(k), you owe the taxes on it and an additional penalty if you withdraw early. You're required to take distributions from it starting at 70 (69 1/2?), because the feds want their tax dollars. Roth 401(k) plans are less common, you'd owe a penalty but not taxes since it's pre-tax money. No mandatory distributions because they've already gotten your money. IRAs are the same. HSAs (mentioned elsewhere) are tax-free if distributions are spent on medical costs. For non-medical costs, you owe taxes and a penalty. After age 65 you'd only owe taxes.
• ghaff 10y ago
  Some people on this thread are using "pensions" (which typically refers to a defined benefit pension based on number of years of service at a company) to also mean 401-Ks (defined contribution). Pensions have become pretty uncommon in the private sector and they're largely unknown in US tech companies at this point. 401-Ks have no underfunding problem. Of course, they expose you to market risk directly.