Source link : https://las-vegas-news.com/personal-pensions-how-the-401k-is-evolving-into-a-guaranteed-lifetime-income/
For most of the twentieth century, retiring Americans could count on a simple arrangement: work long enough for a company, and receive a steady monthly check for the rest of your life. That was the pension era. It is largely gone now, replaced by 401(k) plans that hand the saving, investing, and spending decisions squarely to the individual worker. The results have been uneven. Today, however, something interesting is happening. The 401(k), long criticized for what it lacks, is being redesigned from the inside out to deliver something closer to what a pension once promised: income you cannot outlive.
The Collapse of the Traditional Pension and What Replaced It
The shift from pensions to 401(k)s is one of the most consequential changes in American financial life over the past five decades. One of the notable trends in the U.S. retirement system over the past five decades is that private sector employees have become less likely to be covered by defined benefit pension plans and more likely to be covered by defined contribution pension plans. The numbers tell a stark story. In March 2024, just 15 percent of private industry workers had access to a defined benefit plan – the kind that provides guaranteed retirement benefits based on plan formulas. That is a dramatic drop from the six in ten workers who had access to one back in the 1980s.
In 2023, DC plans had 93.4 million…
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Author : Matthias Binder
Publish date : 2026-05-05 20:25:00
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