Setting Setting SailSail AN EARLY Both the Pension Fund and the 401(k) Fund choose where those contributions are invested allow for money to be set aside for retire- from among several investment options the START: ment on a tax-advantaged basis, meaning 401(k) Fund makes available. Along with Social RYEN’S STORY that contributions and earnings to these Security and personal savings — such as through Funds are allowed to grow tax-free until the 401(k) Fund — the Pension Fund offers Ryen they are withdrawn, as governed by federal a valuable retirement income source for years Ryen, a high school graduate who recently regulations. The Pension Fund is a multiem- to come. completed his apprenticeship with a lead- ployer defined benefit plan funded entirely ing engineering company, is now a full-time by employer contributions negotiated under machinist eligible to receive retirement a CBA, plus investment income. Ryen is not benefits that his union, the International Asso- allowed to make any contributions to the Pen- ciation of Machinists and Aerospace Workers, sion Fund and is not responsible for making and employer have negotiated especially for any decisions about how those employer con- 62% of Americans machinists like him under a collective bar- tributions are invested. As a participant in the age 18-29 have some retirement savings, but gaining agreement (“CBA”). The CBA includes Pension Fund, once Ryen meets the require- only 28% feel on track benefits options available under the IAM ments for a pension, when he retires, he will for retirement. https://www.federalreserve.gov/ National Pension Fund and the IAM National be eligible to receive a retirement benefit, typi- 401(k) Fund. With Ryen just starting on his cally paid monthly. By contrast, the 401(k) Fund 70% of Millennials are retirement journey, understanding the ben- is a multiemployer defined contribution plan stressed and anxious about saving for efit options available under each of the Funds funded by both employer and employee retirement. allows him to set his retirement savings goals contributions. Ryen may elect to have con- https://www.annuity.org/ early and watch them grow over the course of tributions deducted from his paycheck his career. on a pre-tax and after-tax basis, as well as 03