Why is CPF Better Than a 401(k) Account

  • CPF is a real lifetime pension, with benefits calculated using a set formula—a 401(k) is simply an individual savings account subject to market fluctuations.
  • Only employers finance CPF—401(k) participants must finance their own accounts.
  • CPF pays a guaranteed monthly benefit for life—401(k) benefit levels are not known until it is time to retire and you might outlive those benefits.
  • CPF provides spouse, disability and death benefits—401(k)s do not.
  • CPF’s benefits are insured to the limits set by the Pension Benefit Guaranty Corporation—401(k) accounts have no such protection.
  • CPF’s benefits exceed any that can reasonably be expected from a 401(k)—without the risks

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CPF vs. 401(k): A 25-Year Comparison

       See the presentation below to compare hypothetical CPF and 401(k) benefits that would have accrued from        1990 to 2015. 

pdf CPF vs. 401(k): A 25-Year Comparison