I am in the US. In regard to employer based retirement, there are a few pension programs still available, mostly union based. In other corporate environments that do not offer union pensions (as they are non-union)- they offer the 401K if a for-profit or a 403B if non-profit. As you get closer to retirement, many 401K/403B recalibrate to a larger proportion of Bonds vs riskier stocks/futures. Although I also invest in some ETFs that are not pretax (only the earnings are taxable).
Right. OP’s point is that they call both defined benefit (i.e. what some union people get) and defined contribution (i.e. 401k and whatnot) a “pension.” My understanding is that a “pension” is a specific amount of money paid monthly in retirement (used to also just be the wage for certain jobs, not a retirement benefit).
A quick search yielded “defined contribution pensions”, which seems to be a mix: your contributions are invested during employment, and then you get a fixed payment in retirement.
With a 401k, there’s no fixed withdrawal in retirement unless you set one up, the only thing is a mandatory minimum withdrawal at a certain age (73?). My understanding is that wouldn’t be considered a pension since the withdrawal isn’t guaranteed or fixed, and you can withdraw everything if you so choose.
Maybe I’m wrong and a pension is a looser term there, but my understanding is that a pension needs to have a guaranteed benefit in retirement.
I am in the US. In regard to employer based retirement, there are a few pension programs still available, mostly union based. In other corporate environments that do not offer union pensions (as they are non-union)- they offer the 401K if a for-profit or a 403B if non-profit. As you get closer to retirement, many 401K/403B recalibrate to a larger proportion of Bonds vs riskier stocks/futures. Although I also invest in some ETFs that are not pretax (only the earnings are taxable).
Right. OP’s point is that they call both defined benefit (i.e. what some union people get) and defined contribution (i.e. 401k and whatnot) a “pension.” My understanding is that a “pension” is a specific amount of money paid monthly in retirement (used to also just be the wage for certain jobs, not a retirement benefit).
A quick search yielded “defined contribution pensions”, which seems to be a mix: your contributions are invested during employment, and then you get a fixed payment in retirement.
With a 401k, there’s no fixed withdrawal in retirement unless you set one up, the only thing is a mandatory minimum withdrawal at a certain age (73?). My understanding is that wouldn’t be considered a pension since the withdrawal isn’t guaranteed or fixed, and you can withdraw everything if you so choose.
Maybe I’m wrong and a pension is a looser term there, but my understanding is that a pension needs to have a guaranteed benefit in retirement.