Pension
A pension (defined-benefit plan) is an employer promise to pay you a set monthly amount in retirement, usually based on your salary and years of service. Once common, they've largely been replaced by 401(k)s, which shift the investment risk from the employer to you.
Pensions remain common in government, education and union employment. Four features decide what yours is actually worth. The formula, usually years of service multiplied by a percentage of final average salary. Whether it is adjusted for inflation, which over a thirty-year retirement is the difference between comfort and erosion. The survivor option, which trades a lower payment for continued income to a spouse. And the vesting schedule, since leaving early can forfeit it entirely. If offered a lump sum instead, treat it as a genuine calculation rather than a preference: the question is whether investing that sum could reliably produce the same guaranteed, potentially inflation-linked income for life. A pension also reduces how much your own savings must cover.