What is the key difference regarding retirement readiness between a defined benefit plan like FERS and a typical 401(k)?
Answer
FERS provides a guaranteed, often COLA-adjusted income stream, contrasting with the market-dependent nature of 401(k)s
The defined benefit nature of many federal pensions guarantees a specific income stream after retirement, adjusted for inflation, whereas 401(k) readiness relies solely on investment performance and personal contribution levels.
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