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Don’t Write a Pension Resume in a 401k World

Written By: Lauren Howard

Previous generations, like the older end of Boomers and before, were appropriately incentivized to stay in jobs they hated. 

Seriously. Their systems were built so that it didn’t matter if you liked your job because there was a bigger picture. 

They could look forward to a retirement that the company they hated was fully paying for. 

Really. That’s the biggest difference. 

If you got a full-time job as late as the 70s, you could look forward to a full pension after whatever period was agreed upon or at retirement age. A full pension meant you got some portion of your total salary, sometimes as much as 90 or 100 percent, that you could live on when you retired. 

Our current retirement default, the 401k, only creates the same loyalty in the smallest, least sufficient way. Sometimes, your match goes up when you’ve been at a company for a certain amount of time. They might match up to three or six percent. The idea is that money grows over time and can, in theory, replace a pension, but there is no guarantee that it will literally cover your full salary. 

The only way to really amp up those retirement savings is to keep moving to jobs that pay more. 

Don’t write a pension resume in a 401k world. We don’t always have the luxury of staying at a job for a long time because the pot of gold isn’t at the end of the rainbow. Your pension couldn’t always travel with you. Your 401k can . . . to a job that pays you more. 

We do not have the same incentive to stay at companies that some of our parents and grandparents had, and we should stop treating people as if they're disloyal for understanding that. 

If you want loyal employees, give them a reason to be loyal. 


Founder & CEO at elletwo


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