Colloquially speaking, pensions are retirement plans that result in employees receiving a fixed amount of money from their former employers during retirement, often for life (although the technical legal definition of pensions is significantly more nuanced).
Hours of research by our editors, distilled into minutes of clarity.
Instituted by the first Roman emperor, Augustus, around 13 BCE, these early iterations of pensions made it so soldiers sometimes received about a decade's worth of their pay, plus some land to live on. Augustus instituted these pensions to secure loyalty and reduce the risk of coups and unrest. This video includes more fun tidbits about the history of retirement.
Though it looks different in other countries, economic historians trace retirement's rise in the US to a growth in personal income through pensions, GDP, and programs like Social Security.
Ted Benna, a rural benefits consultant, proposed a reinterpretation of a small tweak to the Internal Revenue Code in 1980. This led to a fundamental transformation of how American workers plan for retirement.
This simple calculator takes your age, income, planned contributions, and expected retirement needs into account to give you a portrait of how your financial condition will look when it comes time to start withdrawals.
Annuity rates have risen in recent years, making them a more popular financial product, especially as people live longer. But buying an annuity isn’t a spur-of-the-moment decision.
Most American retirement accounts are not nearly funded enough to support people living longer, healthier lives. Get the details on five individuals at different stages of life and hear how they’ve saved—or not—while expert Theresa Ghilarducci explains the current weaknesses of the retirement regime in America.
Baby Boomers, once the biggest generation, are now creating the largest wave of retirees in US history. Much of this generation is also the first to retire predominantly on the expectation that their 401(k) plans or similar tax-advantaged accounts performed well in the markets—which isn’t always the case.
Pensions are responsible for safeguarding the retirement plans of many corporate and government employees alike. Pensions differ from 401(k) plans and sometimes rely on alternative assets, like hedge funds, to insulate their portfolios of billions of dollars from volatility in financial markets. Read the case top pension advisor Cambridge Associates makes for hedge funds.
With pension plans, a company contributes to an investment fund from which it distributes regular payments to a retired worker until their death. A 401(k) gives the worker control over contributions in a tax-advantaged account.
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