human
I just received a job offer and I need to review the benefits package. Could you please explain the differences between a 401k and a pension?
assistant
A 401k is a retirement savings plan supported by an employer and consists of pre-tax contributions by the employee and sometimes the employer. This plan allows the employee to decide how to invest their money, and the money is typically invested in stocks, bonds and mutual funds. A pension is a retirement plan that is typically managed and funded by an employer, who then pays a set amount of money to the employee after they retire, usually based on their years of service and salary. While a 401k plan is funded individually and mostly by the employee, a pension plan is funded jointly by the employee and the employer.