Unfortunately,....the annuity rate for 401(K) style pensions was dropped to 3.5%,....from 5%,....within the last year.
If you want to retire on $30,000 a year.....previously you would have needed $600,000 in your 401(K) to achieve that. Now,...to make $30,625 a year in "pension" distributions from a 401(k),..........you need $875,000 in your principal under a 3.5% annuity rate......
Wall Street's way of forcing the Labor market to stay employed longer to make up that $275,000 lack in..."pension",........thereby helping to lower wages.
"Cheapest way to lower wages is to increase the size of the Labor pool."..........Oldest economic principle on the books.......
$30,000 a year divided by 12 is $2500 a month......$625 a week,......before taxes.......$15.62 an hour.......just above minimum wage..... 40 + years of hard and dangerous physical labor for just a little more than minimum wage......
$1,500,000 in your 401(k) account principal to make $52,500 a year at the current 3.5% annuity rate......
$2,000,000 in your account to make anywhere near the wages you're making while working...(..$70,000...)(..before taxes...)
Touch the principal in your account,......(...wedding for child,...health problems,...replace a worn-out car...)...and you've shot your "retirement" check,....and you WILL run out of money in 10 years.......
I've retired on a Teamster defined-benefit pension,...32 year's service,....and even with the worst-case scenario 20% cut in my pension ,...and the survivor's clause so my wife continues to get the pension check,......I,....( ..and a lot of other retirees,...).....are doing much better than the $1,000,000 holder in the 401(k) amount. Even if the fund goes entirely defunct....(a remote possibility...),...I still will get enough Government Insurance- backed funds to couple with Social Security to keep us out of the (elderly) poor house......
Exactly where companies tout 401(k)- style plans as being...."superior"....to traditional defined-benefit plans is beyond me.......