The Downsides of 401(k) Plans

Posted on May 2, 2013 | Investor Update

A recent episode of the PBS program Frontline focused on 401(k) plans. Entitled “The Retirement Gamble,” the program discussed both the risks and the costs of retirement saving plans.

A 401(k) plan is a defined-contribution plan: employers can choose to contribute a specified amount to the employee’s savings. In contrast, a pension is a defined-benefit plan: employers agree to provide a specified level of income throughout an employee’s retirement.

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