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401(k) Day Trading by Richard Schmitt

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CHAPTER 2

The Shift

Pensions to 401(k) Plans

The art of progress is to preserve order amid change and to preserve change amid order.

–Alfred North Whitehead

Sure there would be the reunions, but it was his last day with his colleagues at the company that had employed him for 35 years. He had just accepted an early retirement package and was about to venture forward into an unknown phase of life. They shared the customary cake, the presents, and then some heartfelt words. What was left unsaid at the party was the most important of details: he would receive a pension guaranteeing him income for life. For that he was grateful.

There used to be a day when a hardworking employee was rewarded with a gold watch and a pension upon retirement after a long career with an employer. My, how times have changed! People change jobs so often these days that loyalty awards are becoming a thing of the past. The traditional pension is also on its way out of favor, as defined contribution plans, such as 401(k) plans, have supplanted them as the primary type of retirement plan. So the gold watch and pension have been replaced with a handshake and a 401(k) account. By the way, you will need that handshake for good luck in making sure your 401(k) account lasts a lifetime.

Retirement is not what it used to be. Retirement used to be that time of your life when you stopped working for pay and instead relied on Social Security, employer-sponsored retirement plans, and accumulated savings to sustain your ...

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