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Was the 401(k) a Mistake? How an obscure, 45-year old tax change transformed retirement and left so many Americans out in the cold. (www.nytimes.com)

submitted 4 months ago by Blaze@reddthat.com to c/personalfinance@lemmy.ml

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[–] Copernican@lemmy.world 1 points 4 months ago (1 children)

I think the "Pensions you don’t contribute to and the amount you get is fixed." is a bit murky. If you have a pension that probably means you have a lower salary compared to an equivalent non pension job, because part of your labor value goes into funding the pension. But the main thing is 401(k) puts a lot of responsibility on the individual. And as this article points out, if you put a lot put retirement financial planning on the individual, that creates a larger social problem since many people can't sufficiently do that themselves, even if they are being responsible with what they earn.

[–] Squizzy@lemmy.world 2 points 4 months ago

Yeah see the only different here is if the benefit is defined or the contribution is. Employers still give decently toward the DC and they manage the scheme. They have group schemes that all empkoyees are a part of and you cant leave it unless you leave the job or decide not to contribute.