Pension or 401k

[LivingAlmostLarge]

Pension for sure. Now pensions of course with private companies I wouldn't look at as a guarantee. But federal, military, state pensions? Well that's a different animal I think. They can change or lower it but it won't be going away like private companies.

There is a reason why pensions are being dropped by companies and even state/federal governments are trying to minimize pensions. They cost the employers too much. You need to have a very large contribution to make the payout at the end.

Tomhole hit on the head for every $40k in pension payout you need around $1M saved, so would these people with these pensions have saved that much?

[~bs]

I agree but you also must take in to consideration that Pensions are going away and ARE NOT guaranteed no mater what you think or have heard. Companies/The Feds can tweak/change/defund pensions anytime they want so "buyer be 'ware".

Nobody said they were guaranteed, and I even highlighted it as a weakness in one of my above posts. Instead, I said it was best used as a means of diversification in retirement assets, and that you should pay attention to the state of the pension fund. I wouldn't put all my assets in 1 mutual fund no more than I would want to put them all in 1 retirement vehicle if there's other options that that have their own sets of benefits as well. A combined pension/SS in retirement can put you at 70% - 80% of retirement income (depending on the plan), which doesn't require you to take distributions from your 401k plan or ira. Instead, your 401k money can continue to accumulate until you need it. That benefit is something that's really hard to ignore if it's an option for you.

the original poster also stated he works for the state. Many times they'll offer partial or full medical coverage for the employee, which is another benefit slowly being phased out by private companies & governments as well. That is another important consideration Even if they do scale back the benefit to 50% or less, medical costs is expensive, and will only continue to escalate as people live longer and cost of treatments increase.