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Chapter 1. What Is a 401(k)? > Taking Advantage of Protective Shells - Pg. 6

What Is a 401(k)? · Benefits are generally presented as a monthly dollar amount beginning at age 65. 6 Warning! The Economic Growth & Tax Relief Reconciliation Act of 2001 (whooh--couldn't they have simplified this thing?) requires employers to notify employees in writing if they plan on "reducing the rate of future benefit accruals," which generally happens when employers convert to a cash-balance plan. The good news: Most employers do this anyway. Remember that traditional pension plans reward older, long-service workers (see the pension facts of life mentioned previously). Well, if they reward only older, long-service employees, they then don't do very much for these folks: · Young, short-service employees · Young, long-service employees · Old, short-service employees If the worker of today (you and me) was like the worker of yesterday (our moms and dads), then