Right. OP’s point is that they call both defined benefit (i.e. what some union people get) and defined contribution (i.e. 401k and whatnot) a “pension.” My understanding is that a “pension” is a specific amount of money paid monthly in retirement (used to also just be the wage for certain jobs, not a retirement benefit).
A quick search yielded “defined contribution pensions”, which seems to be a mix: your contributions are invested during employment, and then you get a fixed payment in retirement.
With a 401k, there’s no fixed withdrawal in retirement unless you set one up, the only thing is a mandatory minimum withdrawal at a certain age (73?). My understanding is that wouldn’t be considered a pension since the withdrawal isn’t guaranteed or fixed, and you can withdraw everything if you so choose.
Maybe I’m wrong and a pension is a looser term there, but my understanding is that a pension needs to have a guaranteed benefit in retirement.
Right. OP’s point is that they call both defined benefit (i.e. what some union people get) and defined contribution (i.e. 401k and whatnot) a “pension.” My understanding is that a “pension” is a specific amount of money paid monthly in retirement (used to also just be the wage for certain jobs, not a retirement benefit).
A quick search yielded “defined contribution pensions”, which seems to be a mix: your contributions are invested during employment, and then you get a fixed payment in retirement.
With a 401k, there’s no fixed withdrawal in retirement unless you set one up, the only thing is a mandatory minimum withdrawal at a certain age (73?). My understanding is that wouldn’t be considered a pension since the withdrawal isn’t guaranteed or fixed, and you can withdraw everything if you so choose.
Maybe I’m wrong and a pension is a looser term there, but my understanding is that a pension needs to have a guaranteed benefit in retirement.