In the American landscape, retirement has shifted from a promise made by employers to a gamble taken by employees. To understand the “bridge” people are currently crossing, we have to look at the two very different structures: the 401(k) (Defined Contribution) and the Pension (Defined Benefit).
The Breakdown: Who Has What?
In 2026, the gap between the public and private sectors remains the defining feature of retirement security. While the 401(k) is the standard for most, a small percentage of workers still hold the “gold standard” of a traditional pension.
| Sector | Access to 401(k) / DC Plans | Access to Traditional Pensions |
| Private Industry | 70% | 14% |
| State/Local Govt | 39% | 86% |
Note: Data based on recent Bureau of Labor Statistics reports (2025/2026).
401(k): The Individual Gamble
The 401(k) is a Defined Contribution plan. This is the model you referred to as a “joke that feeds Wall Street.”
- What it looks like: You (the employee) put your own money in. The employer might match a small percentage (usually 3–6%).
- The Risk: You bear 100% of the risk. If the market crashes the year you retire, your “bridge” collapses. There is no guarantee of how much you will have or how long it will last.
- The Reality: Only about 50% of private-sector workers actually participate in these plans. For many, high fees and market volatility mean the “retirement” they were promised is actually just a shrinking pool of savings managed by investment firms.
Traditional Pension: The Employer’s Promise
The pension is a Defined Benefit plan. This is what most people mean when they say “retirement provided by the employer.”
- What it looks like: The employer contributes all (or the vast majority) of the funds and manages the investments. When you retire, you receive a guaranteed monthly check for life, usually based on your salary and years of service.
- The Risk: The employer bears the risk. If the investments do poorly, the company (or government) is legally obligated to find the money to pay you.
- Who has it: It has largely disappeared from the private sector. Today, it is mostly reserved for teachers, police, firefighters, and long-term government employees. Only about 11% of private-sector workers actually participate in one today, down from nearly 40% in the late 1970s.
The “Bridge to Far” Reality
For the “most vulnerable” members of society, neither of these is a guarantee. Those in the bottom 50% of earners often have zero access to any employer-sponsored plan. They are left with only Social Security—which was never intended to be a full retirement plan, but a floor to prevent poverty.
When we talk about “moving on,” the shift from pensions to 401(k)s represents a massive transfer of risk. Corporations moved the “burden” of retirement off their balance sheets and onto the backs of the individuals driving the wheels of industry.
Divergence between corporate profits, the stock market (the proxy for the 401(k)), and the actual wages of the people driving the “wheels of industry.”
The Divergence: Profits vs. People (1990–2025)
The chart illustrates a massive gap that has opened up over the last 35 years. While all three metrics started at a base of 100 in 1990, the path they took explains why “moving up” has become so difficult for the individual worker.
- The Market Winner (S&P 500 / 401k Proxy): This line shows the most explosive growth. Because the 401(k) system is tied to the stock market, the value of assets has skyrocketed. However, this primarily benefits those who already have the surplus income to invest heavily.
- The Corporate Winner (After-Tax Profits): Corporate profits have outpaced the growth of the economy and wages significantly. Since the 1980s, corporations have been able to “move up” by cutting costs—specifically by replacing guaranteed pensions with 401(k) plans.
- The Worker Gap (Wages): While wages have risen in nominal dollars, their growth relative to corporate profits and market assets is nearly flat. This is the “mud” that keeps individuals from moving on; the engine is producing more power than ever, but very little of that fuel is reaching the people turning the wheels.
Who Wins in the End?
When we analyze the transition from the New Deal-era “Defined Benefit” (Pensions) to the modern “Defined Contribution” (401k), it becomes clear that the “win” is not shared equally.
- Wall Street Wins: By turning retirement into a market-based product, Wall Street firms collect management fees on every dollar in the system. Whether the market goes up or down, the “house” always takes its cut.
- Corporations Win: For a corporation, a pension is a long-term liability—a promise they have to keep for decades. By switching to a 401(k), they shifted 100% of the risk onto the employee. They no longer have to worry about “market crashes” affecting their retirement obligations; that is now the worker’s problem.
- The High-Earner Wins: Because the 401(k) is a tax-advantaged vehicle, those who earn enough to max out their contributions see massive growth. This reinforces the “property and lifestyle” of the already wealthy.
- The Average Worker Faces the “Bridge to Far”: The median 401(k) balance in the U.S. is approximately $35,000, while corporate profits sit at record highs of over $3.5 trillion. For the average person, the 401(k) isn’t a bridge to freedom; it’s a high-stakes gamble where they are forced to play with their own survival money.
In the end, the “wheels of industry” are turning faster than ever, but the system is designed to reward the machine, not the driver. If we truly believe that “moving on is the true freedom,” then the floor we provide must be as solid as the bailouts we give to the corporations. Without that stability, the individual is not participating in a market—they are simply being consumed by it.