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Both opposing points have one similarity: How to get yours and get the most you can out of life so you and your family can be as comfortable as possible. To that end there is no comparison in terms of what would benefit the average person most. DB would win all day hands down. This is because they provide generous benefits without any real effort on an individuals part. There is a reason why they are being phased out.
But Mathjak is correct regarding learning to play the cards your dealt. Most people never do that and that's why the mean retirement income is astonishingly low at $34K. The majority of the population put in literally zero thought into retirement until they are about 5-8 years away from it. Most just work, spend money, save a little and repeat that cycle all their lives without ever taking control. Anyone would be wise to start planning asap to reap the rewards later. I started when I was 25 (and I still kick myself for not starting sooner) and it has improved my financial position exponentially.
many pensions required very little in employee contributions so that is why the spia is not the same .
not "up front" exactly...
Before, it seems like jobs with pensions got paid less, that was the "contribution" by the employees... IE 30 years of lower pay for a pension.
Now when people get paid more, but instead of putting that money aside for retirement, they just spend it...
Mostly, the 401k(s) for people under 55, can max it at $18k... do that for 30 years and you'll have more than enough to retire on. So... how many people max their 401ks? Do they even come close? What about just half that? The "advice" is put in enough to get matching... so what 5%?
Social progress means not accepting the status quo...
It seems to me that being responsible for your own retirement is rejecting the idea that you will let someone else plan for it, so if you don't want status quo (as in forced savings that you have no control over) then make your own plan, be a rebel, you can do it!
But, aren't most 401K's also pretty much contributory on the employee side (up to about 50% with matching employer funds)?
This is nonsense. Only 15% of 401(k) plans match 6% or higher. The median is 3%. I've been working for 30+ years. Last year was the first time I ever got any 401(k) match at all and it was a lousy 3% safe harbor.
The problem is that people pick the fancy smartphone and new car instead of mundane things like maintaining a high savings rate. With a pension, there was no decision. With a 401(k), people, being human, tend to go for the immediate gratification.
No corporation is ever going to take on the risk of a defined-benefit pension again. They want their employees to assume 100% of the risk. You don't like it? Go on strike demanding the benefit and watch them chain the doors and move your job offshore. It's only public sector jobs where defined benefit pensions still exist. Even there, younger workers are mostly being shifted away from defined-benefit pensions. There are a huge number of states and cities/towns with enormous unfunded pension obligations. It's pretty easy to predict that Federal law will change allowing states to go bankrupt and walk away from most of that obligation.
Before, it seems like jobs with pensions got paid less, that was the "contribution" by the employees... IE 30 years of lower pay for a pension.
Now when people get paid more, but instead of putting that money aside for retirement, they just spend it...
Mostly, the 401k(s) for people under 55, can max it at $18k... do that for 30 years and you'll have more than enough to retire on. So... how many people max their 401ks? Do they even come close? What about just half that? The "advice" is put in enough to get matching... so what 5%?
People only put in 5% and expect to retire?
The idea that most of America can fund a retirement even coming close to what they'd get if they had a pension is laughable. As posted, median income is $52k and you're seriously suggesting people can live on 2/3 of their available pay? That is a joke and I don't blame anyone for not maxing out their 401ks at lower incomes. The reality is most of America can't retire comfortably simply because they didn't earn enough to do so.
People don't get paid more now, they get paid less, all the well paying union jobs with pensions are in China now.
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