Pension vs 401(k) Plans: Which is Better?

Choosing a pension vs 401(k) plan can be tricky. Make sure you ask the right questions.

Two nests, each with a gold egg, representing a nest egg.
(Image credit: Getty Images)

Parsing the benefits of a pension vs 401(k) plan can be challenging, as these income-replacement vehicles are two very different animals. 

A pension is a regular, predictable, and guaranteed monthly income stream funded solely by your employer. In contrast, with a 401(k), the amount of money you amass to pay for retirement expenses is determined by the contributions you (and your employer) make to the account, how aggressively you invest, and the market returns you earn. 

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Contributing Writer