In the past, a majority of employees were able to earn a pension from their employers. More Americans would spend the majority of their careers in one industry, with one company. And when they retired, the pension would pay out in retirement, the amount based on the amount they earned during their careers.
For the most part, those days are gone. Pensions have been replaced in large part by individual 401k plans. And many companies, in an effort to attract and retain talented workers, offer these retirement plans to their employees. If your company offers a 401k plan, and especially if they match contributions in any way, you should get enrolled as soon as possible to take advantage of this tool for effective retirement savings.
To learn more about how we got from pensions to 401ks, click here.