4 ms·

401k is a retirement plan. A self-funded retirement plan. It shifts the burden from employers to employees. As a positive, it means employees are more free to

• ghaff 7y ago
  Traditional defined benefit plans were almost always oriented around long term employment (like a decade or more) at a single company/organization. If you moved around every few years, you'd basically not get a pension paid out by anyone. On the other hand, as you suggest, defined benefit was one traditional source of income in retirement that didn't require any action/saving discipline on the employee's part. But that's mostly gone in the private sector now.
• briandear 7y ago
  It also means that employees can make their own investment decisions rather than being literally at the mercy of pension administrators and their investment decisions. You can also pass on your funds to your family, while defined benefit pensions generally end when you die.