How 401(k) Plans Work And Why They Killed Pensions

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Since 1980, pensions plans have been phased out in favor of 401(k) plans. They now represent nearly one-fifth of the U.S. retirement market. So how did 401(k) plans become such a popular form of retirement savings and how should they be used? Watch the video to find out.

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How 401(k) Plans Work And Why They Killed Pensions

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20 COMMENTS

  1. investing requires good experience and knowledge to carry out a good and successful trade, I have lost a lot trying to trade all by myself May I ask which investments are good??>>>>

  2. As a self-employed beekeeper who owns an LLC, I was wondering if it's possible for me to open a Traditional IRA and then perform a rollover or backdoor IRA into a Roth IRA. I want to know if this is legally permissible and if there is any program available for this. Furthermore, I'm interested in continuing to contribute to the Roth IRA as a self-employed individual.

  4. Pension funds are invested in the market the same way a 401k is. When you have control of the contributions and investments, you also have control over the CB ROI. Yes, it’s nice to have a nice steady check with a pension, but that’s also obtainable with 401k money. Just take a lump sum out at retirement, pay the tax and buy an annuity.

  5. IMO, 401k plans are Ponzi schemes that benefit the stock market, account brokers, and employers more than employees/retirees. A person with a 401k who is retiring today, would need to amass at least One million dollars in savings to comfortably retire. Most people nearing retirement in a 401k have nowhere near that amount. With the rising inflation rate, and tax rates, millennials will need even more. Also, you are at the "mercy" of the stock market. If it goes down, so does your savings/investments. There is also the danger of a market wide crash that would evaporate your savings in minutes. And the one question all 401k holders need to ask themselves is; will you OUTLIVE your savings? Most retirees with underfunded 401k's probably will. This is the advantage of a defined benefit pension.

  7. The thought of retirement makes me cry. My apologies to everyone who have retired and filing social security during this time after putting in all those years of work just to lose everything to a problem you weren't to blame for.it's especially difficult for people who are retired.

  10. I have a question. I am not very wise on the whole retirement investment area of career building but I’m in my early 30s and want to make sure I’m set up for a comfortable retirement. I work for a public school system that does not have Social Security as a benefit for retirement. Instead they have a Teachers Retirement System that replaces social security. It is separate from the 403b. I just learned that a 403b is the retirement investment for state jobs which replaces a 401k. Do these seem like good benefits? Should I still invest into my 401k from previous jobs? I wish they prepared us better for adulthood when we were in high school.

  11. 7:33 shows what could be the topic of another video by itself…since 1971, low and high income households have increased regularly, while middle income has dropped regularly. Some would say this has been the plan all along.

  15. The 401K is like an iceberg, you don't see the danger until it's too late. No matter what your strategy is, it's not set up for you to win. You will always take a loss on your current and future Investments. You will never make up the money you lost the day before, while contributing even more tomorrow. My blue-collar workers know this all too well, half of my contributions were in overtime pay. Not to mention I had a Roth 401, paying the taxes up front was a game changer. NOTE: I made my most money when the Republicans was in charge, I'm just saying. 🤣🤣🤣🤣

  16. This day and time hardly any working class individuals can afford to put enough money in a 401 that would realistically be enough to retire on.

  18. This segment is way too pro business. The reason there are few pensions today is simply that companies dropped pensions completely. It was not an option to switch!

Comments are closed.