Originally Posted by
marcal
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.
Heck, with a 30 year timeframe you can just leave it in an index 500 fund. Thirty years will tame a $hitload of stock market volatility. Besides, you aren’t going to take any out of a 401k until you are 72 and 1/2 and then only the required minimum distribution (~4% per year to start) because it’s more tax advantaged than your other investments.