A pension is not a retirement fund either, from the perspective of the worker and the worker’s family. A pension is paid to the worker for the remainder of the worker’s life, regardless of the amount the worker has paid into the fund. If they put in 20 years worth of payments and live 40 years, they collect 40 years of payments. If they live only two months, they only collect two months of payments.
I would agree that social security is comparable to a pension or retirement insurance, in that the payout is not necessarily commensurate with the pay-in.
A 401k is a fund. If the worker puts in 20 years of payments, and only lives two months, the worker’s heirs receive 19 years and 10 months worth of payments.
The mechanism of operation is so different that they cannot be considered the same thing. Even though they are used for similar purposes, they are not reasonably comparable.
A pension is not a retirement fund either, from the perspective of the worker and the worker’s family. A pension is paid to the worker for the remainder of the worker’s life, regardless of the amount the worker has paid into the fund. If they put in 20 years worth of payments and live 40 years, they collect 40 years of payments. If they live only two months, they only collect two months of payments.
I would agree that social security is comparable to a pension or retirement insurance, in that the payout is not necessarily commensurate with the pay-in.
A 401k is a fund. If the worker puts in 20 years of payments, and only lives two months, the worker’s heirs receive 19 years and 10 months worth of payments.
401ks directly replaced pensions for most Americans. It’s disingenuous to claim they’re “in no way comparable.”
Yeah? Cars replaced horses for most Americans.
The mechanism of operation is so different that they cannot be considered the same thing. Even though they are used for similar purposes, they are not reasonably comparable.