The Death Of The Pension: How 50-Year-Old Employee Just Lost A $580K Safety Net

A 50-year-old worker’s retirement plans were upended after their company announced a halt to all future pension contributions. 

The move wipes out an expected $580,000 in future benefits, forcing the employee to navigate a sudden shift from a guaranteed corporate payout to a 401(k), according to a post on the r/personalfinance subreddit. 

“I realize I was lucky to have gotten the pension for as long as I did, a lot of people don’t have that,” the employee posted. “But I still feel pissed about it.” 

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The $580,000 Disappearing Act

The employee, an 18-year veteran of the firm, was enrolled in a plan designed to pay out 16% of their final salary starting at age 65. While the $375,000 already accrued is legally protected and vested, the freeze on future service means the worker will miss out on over $500,000 in projected growth over the next 15 years. 

To compensate, the company is increasing its 401(k) contribution by 2%. For a mid-career professional, replacing a guaranteed pension with a small percentage bump in a market-variable account is rarely an equal trade. The worker noted the sting of the decision was sharpened by executive pay. 

“The CEO has triple his pay since 2020 and got a $6M bonus for 2025,” they wrote. 

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Navigating the Aftermath: 401(k) vs. IRA

With the safety net gone, the user is now asking where to direct their remaining retirement savings. Their current 402(k) is held at T. Rowe Price, but they are considering an outside individual retirement account. 

Suggestions from the reddit community ranged from sticking with T. Rowe Price for the IRA to buying Vanguard ETFs.

“But, I’d first max out my 401(k). Then, contribute to the IRA,” one user posted. “Save at least 15% of your gross salary.” 

Another community member said the original poster should not “cry too much about the pension” because pensions often have risks that aren’t obvious. 

“The company could fall on hard times and not make enough contribution to keep the pension solvent, you could lose your job for one reason or another before accumulating the additional credits you expect, it could be way outperformed by the stock market in the next 15 years,” they wrote.

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