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Social Security just a piece of retirement. Learn about 401k plans here
Social Security income is an important monthly benefit to nearly 63 million people each month. But the program only replaces about 40 percent of pre-retirement income, and this varies depending on factors such as lifetime income, number of years in the workforce, etc. So, experts agree that with the decline of the traditional company pension, 401k plans are and will only become even more important, indeed even a cornerstone of retirement income. In a nutshell, 401(k)s are defined contribution plans, unlike traditional defined benefit pension plans. The retirement benefits 401k plans produce depend on the performance of the account(s) underlying investments. Read more from Matthew Frankel’s easy to understand but very comprehensive article on 401k plans here.