Originally Posted by
NotMrNiceGuy
I’m seeing a lot of hate on the pension. But here’s a consideration. Diversity of revenue streams in retirement. The DC is wholly tied to the market. If you have a down year in retirement, that can really impact your QOL and peace of mind in the golden years. Would be nice to have a revenue stream independent of market fluctuations.
Thoughts?
Here’s the thing…..where do you think pension boards invest pension money?
IN THE MARKET
The diff though is that if an individual hasn’t diversified accordingly, a 22% market decline affects only themselves.
If every employee is in a pension and the market drops 22%, it puts the entire pension plan under duress which affects everyone.
A well diversified, properly allocated 401K plan is light years better than a pension due to the lack of systemic problems in a market down turn.
It’s as simple as putting your 401K in a target date fund and checking back in 30 years.