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Why a 401(k) Will Yield You More Money Than a Pension
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<blockquote data-quote="Up In Smoke" data-source="post: 5614403" data-attributes="member: 79702"><p>Your example and theory is highly flawed. If you want to compare the pension vs a 401k match, then leave your contributions to a 401K out of the equation. If John's company matches at 5% or $5000 per year, use that amount against the value of a pension because that's what the company is contributing. So, 5K per year for 35 years at 5% return nets you around 500K. Drawing from that amount at the rate of 70K per year (your pension value) nets you 7 years of returns. That's 13 years short of the pension draws in your example. Thank goodness we have both.</p></blockquote><p></p>
[QUOTE="Up In Smoke, post: 5614403, member: 79702"] Your example and theory is highly flawed. If you want to compare the pension vs a 401k match, then leave your contributions to a 401K out of the equation. If John's company matches at 5% or $5000 per year, use that amount against the value of a pension because that's what the company is contributing. So, 5K per year for 35 years at 5% return nets you around 500K. Drawing from that amount at the rate of 70K per year (your pension value) nets you 7 years of returns. That's 13 years short of the pension draws in your example. Thank goodness we have both. [/QUOTE]
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Why a 401(k) Will Yield You More Money Than a Pension
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