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Pensions vs. 401(k)s: Why Employers Might Choose the Traditional Route

SmartAsset
Summary
Nutrition label

82% Informative

A new study from the National Institute on Retirement Security suggests that pension plans may actually cost employers less than 401(k) plans.

The study found that in order to replace 54% of income for employees after retirement, a DB plan required contributions of 16.5% of total payroll.

A pension plan works by having money contributed to a pool by both the company and employees who are enrolled in the plan.

An emergency fund should be liquid -- in an account that isn't at risk of fluctuation like the stock market.

The tradeoff is that the value of liquid cash can be eroded by inflation.

A high-interest account allows you to earn compound interest.

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VR Score

79

Informative language

75

Neutral language

65

Article tone

informal

Language

English

Language complexity

51

Offensive language

not offensive

Hate speech

not hateful

Attention-grabbing headline

not detected

Known propaganda techniques

not detected

Time-value

long-living

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no affiliate links