An Umbrella with Holes Gary Silverman column

June 13, 2021

When we compare pensions and 401(k)s, a few issues came to mind: Compared to a pension, a 401(k) (or its cousin the 403(b)) puts the onus on the employee to do the investing.

Most, if not all, of the contributions to the plan come from the employee, not the employer, and there is no guarantee as to what the account will be worth at retirement.

These are big problems.

Gary Silverman, owner, Personal Money Planning

Now, for many of our readers, 401(k) plans work just fine. You have income above your needs, so shifting some of it toward retirement is doable. You’ve learned how not to make investment mistakes, so the investing part is not an issue.

And you’ve been reasonable about your financial planning in figuring just how much income your retirement savings can provide in retirement.

You’re in the minority there.

Many families just don’t have enough left over at the end of the month to save. We can argue whether this is their “fault” or if society puts them in that situation. Regardless, they are there.