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Americans Favor Pensions Over 401(k)s for Secure Retirement

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  • Staff Report 

A recent survey has shown that most Americans prefer traditional pensions to 401(k) plans for securing a comfortable retirement. Despite this preference, the number of people with private-sector pension plans has significantly dropped from 27 million in 1975 to fewer than 13 million in 2019, with modern pensions mostly existing within the public sector. The survey’s findings underscore the nostalgia and perceived security associated with pensions, despite their declining availability in today’s job market.

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The shift from pensions to 401(k)s over the past few decades has transferred the responsibility and risk of retirement savings from employers to employees. While pensions provide a guaranteed income for retirees, 401(k)s require individuals to make complex decisions about their savings at retirement, a prospect that many find daunting. This transition reflects broader changes in the economic landscape and employment practices.

Despite their popularity, experts caution that the golden age of pensions might be more myth than reality, with pensions historically inaccessible to many workers and costly for employers. Recent enthusiasm for a pension revival, sparked by demands from striking autoworkers and a new retirement plan from IBM, faces significant challenges. The debate continues over whether the benefits of pensions outweigh their costs and complexities, both for employers and employees.

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