A pension — also called a defined benefit plan — provides a guaranteed monthly income for life, funded and managed by your employer. Your benefit is typically based on your years of service and salary history. A 401(k) — also called a defined contribution plan — is an employee-funded savings account where you direct your own contributions and investment choices. The amount available at retirement depends on how much you saved and how your investments performed. Many workers have access to both, and coordinating them effectively is an important part of retirement income planning.