Question: Does a traditional pension plan preclude you from claiming destitution if needed, like a

[WingDinger]

401K does?

[SheilaT]

1. What exactly do you mean?

Certainly if you have a couple of hundred thousand dollars in a 401k you aren't destitute.

A traditional pension is a promise of a specific sum of money each month for the rest of your life. Depending on what that sum is, you could still be destitute.

In a couple of years I'll start collecting about $150/month in a pension from a job I worked in between 1969 and 1979. If there were to be my only income, clearly I'd be destitute. Around the same time I'll probably start collecting Social Security, and as it stands now I'll probably get around $1100/month there. I won't be destitute, but if those two things were to be my only sources of income and I were trying to live on my own and depending on where I were living, I'd be quite poor and no doubt eligible for various services.

[exboyfil]

3. You could convert the 401k to an annuity

and then be in the same boat as a pension. You may find that the pension has more actuarial value than the 401(k).

[SheilaT]

4. But wouldn't you still potentially have access to

the original money? I guess it would depend on how the annuity is structured, and also how old you are.

[sinkingfeeling]

2. My pension puts me just slightly above the average American income.