This is not a big deal, but facts are relevant. What we read and hear is not always fact or complete.
In the meantime “most state and local government employees (83 percent of those working full time) participated in a defined benefit (DB) pension plan in 2018, and nearly all (94 percent) had access to such plans.”
Note too that frequently the terms pension and retirement plan are inaccurately used interchangeably. They are not the same. A “retirement plan” frequently includes a defined contribution type plan such as a 401k plan, a true pension plan is a defined benefit plan.
As for the three-legged stool, yup we used to tell people that long before the takeover by the 401k, but legs were a pension, Social Security and personal savings.
Nobody wants to retire broke, but it’s an unfortunate reality many Americans will face. Today’s workers face a unique struggle in that the majority of their retirement income will need to come from their personal savings. Previous generations were able to receive the bulk of their income from pensions and Social Security benefits.
Today, though, few employers still offer pensions, and Social Security benefits are only designed to replace around 40% of your pre-retirement income. That means most retirees will need to lean heavily on their savings to make it through retirement, yet many workers are woefully unprepared financially. And there’s one group in particular that may struggle more than most.
Some retirees are more at risk than others To ensure you’re as financially comfortable as possible in retirement, some experts recommend thinking of your finances as a “three-legged stool.” In other words, that means you should have income from a defined benefit plan (such as a pension), a defined contribution plan (like a 401(k)) and Social Security benefits