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Allison Schrager

Pensions Aren’t the Answer to Your Retirement Anxiety

It’s tempting to think of a steady payout from your employer as the ideal way to fund your golden years, but private investment accounts like 401(k)s are better at securing a nest egg — for those who take advantage of them.

Retirement costs a lot no matter what.

Retirement costs a lot no matter what.

Photographer: Valery Hache/AFP via Getty Images

The market is down, inflation is up and your retirement prospects aren't looking so good. It's tempting to pine for the old days, when employers provided defined pensions to workers, giving them more certainty in their golden years. Except…. it wasn't quite like that, actually. Defined benefit pensions are overrated. Even in this scary market, you should be grateful to have a retirement account like a 401(k).

The future of retirement should be individual retirement accounts. We should phase out pensions in public sector jobs and make retirement accounts accessible to more people rather than enlarging Social Security.