[USER]

I’m not seeing pensions in the equation when people post about their situation. Is the 401K the equivalent of your pension? I apologise in advance for my ignorance.

[Viv]

So a 401k is like compulsory super in Australia? Our employers contribute about 10% of salary figure (on top of gross salary) & the employee contributes other funds & you get a tax break on the contribution. That’s taxed at 15%. If someone doesn’t have a Super account, then they can get a government pension but it’s not much.

[Suzanne]

Most employers today do not offer the pension you are thinking about. That you work for “x” years and get “y” monthly. Many have moved to the 401k concept which is an investment portfolio. They pitch in a certain amount and you can sometimes pitch in and even match them. Usually a small percentage of salary is what they contribute. Good question.

[Leigh]

My husband has a pension but I do not…by the time I started at my company in 2012 they ended that program. There are talks of my husband’s company paying out their pension now since it’s costly to manage. He also has a 401k.

I have a 401k match but I still have a ways to go.

We also have social security but I am not counting on it as I am 38.

[Heather]

Very few companies provide a pension in the US. I have a pension from state government work.

[Kris]

In the UK you call it a pension. In the US we have something similar we call Social Security. It is not tied to a specific employer and you are taxed by each employer you have throughout your life, with few exceptions.

If a person dies before their retirement age in their 60’s they lose everything they lose it and receive no benefit.

In the US what we call a “pension” is tied to a specific job/employer and is mostly funded by the employer. They are disappearing and being replaced by employee funded retirement accounts like 401k’s which are shifting the burden of saving for retirement income from employer to employee.

A 401k that is mostly funded by the employee. If a person dies that account goes to their heirs.

[Joan]

Pensions in the US largely went away in the 1980s when the laws were tightened up to prevent employers from stealing the pension funds. 401ks are NOTHING like a pension. A pension is defined benefit – you get a certain amount per month no matter how old you may live to be. A 401k is defined contribution – an investment amount that could easily run out if you are long lived. It is up to the individual to be sure they have saved enough.

There are still a few people in the US that have pensions – most government jobs (including K-12 and higher education, police, military, firefighters, etc) offer them INSTEAD of paying market wage for a position they pay much less BUT you get a pension.

The last generation to widely have pensions in private sector jobs is the Silent generation born 1928-1946. Many of these folks who are still alive are in their 90s.

[Author]

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