{"id":30395,"date":"2018-12-17T22:34:27","date_gmt":"2018-12-17T22:34:27","guid":{"rendered":"http:\/\/www.ufcw.org\/?p=30395"},"modified":"2020-09-08T17:24:52","modified_gmt":"2020-09-08T17:24:52","slug":"pension","status":"publish","type":"post","link":"https:\/\/www.ufcw.org\/pension\/","title":{"rendered":"What\u2019s a pension? How\u2019s it Different from a 401(k)?"},"content":{"rendered":"
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If you\u2019re a 20-something juggling student-loan debt and a fast-changing economy, finding the time to think about a pension can be tough. This simple explainer shows the value of a pension and how powerful they can be.<\/p>\n<\/div>\n\n

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What\u2019s a pension? How\u2019s it Different from a 401(k)?<\/h1>\n<\/div>\n\n
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One of the most common types of retirement plans in America is a 401(k). A pension is different from a 401(k) and is a form of what investment pros call a \u201cDefined Benefit (DB)<\/strong>\u201d retirement plan. A 401(k) is what\u2019s known as a \u201cDefined Contribution (DC)<\/strong>\u201d plan.<\/p>\n<\/div>\n\n

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Think about it this way: in a 401(k) the amount you put in is fixed, but the amount you take out when you retire is unknown, because you don\u2019t know how the stock market will perform. A pension is a guaranteed sum of money that you start to receive once you retire and lasts until the day you die. It\u2019s a guaranteed income stream that will live as long as you do.<\/p>\n<\/div>\n\n

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Less Stress When You Prepare Well, No Matter How Life Goes<\/h1>\n<\/div>\n\n
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Pensions are Less Risky. <\/strong><\/h5>\n<\/div>\n\n
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While no retirement tools are 100% without risk, your pension is less risky than a 401(k). Pensions aren\u2019t as susceptible to market swings like 401(k)s.<\/h5>\n<\/div>\n\n
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