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Another argument is the risk of early death means that the earned benefit resulting from a lifetime of work defaults to the pension plan (as part of the agreeme
by sokoloff 3y ago
Another argument is the risk of early death means that the earned benefit resulting from a lifetime of work defaults to the pension plan (as part of the agreement) rather than to the heirs of the person who worked a lifetime and suffered the early death.
Many people are OK with that tradeoff, but nowhere near everyone is.
- lotsofpulp 3y agoTaxpayer funded pensions frequently come with cushy terms that allow a spouse to continue receiving benefits after the retiree dies, called joint and survivor benefit.
- cool_dude85 3y agoMost pension plans offer the possibility of a cash out or transfer of actuarial benefit to a 401k-type plan. Except in the case of accidental death where there genuinely is no time to do so, if you were sitting on your deathbed you could at least theoretically take the money and run. And most pension plans offer death benefits while you're active so the calculation may not be so cut-and-dry whether the pension is better or if you'd have been better off with an individual account. But yes, you can certainly find individual cases where a specific person would have been better off with 401k for this or other reasons. My claim is that it's systematically better for almost everyone and better overall.