Defined Contribution Plan

Business / Taxes / Defined Contribution Plan: In a defined contribution retirement plan, the benefits — that is, what you can expect to accumulate and ultimately withdraw from the plan — are not predetermined, as they are with a defined benefit plan. Instead, the retirement income you receive will depend on how much is contributed to the plan, how it is invested, and what the return on the investment is. One advantage of defined contribution plans, such as 401(k)s, 403(b)s, 457s, and profit-sharing plans, is that you often have some control over how your retirement dollars are invested. Your choice may include stock or bond mutual funds, annuities, guaranteed investment contracts (GICs), company stock, cash equivalents, or a combination of these choices. An added benefit is that, if you switch jobs, you can take your accumulated retirement assets with you, either rolling them into an individual retirement plan (IRA) or a new employer's plan if the plan accepts transfers.

Other Words for Plan

Plan Noun Synonyms: design, layout, blueprint, scheme, method, procedure, system, arrangement, programme, project, formula, pattern, script, scenario
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Keogh Plan

Business / Finance / Keogh Plan: A type of pension account in which taxes are deferred. Available to those who are self-employed. MORE

Employee Stock Ownership Plan (ESOP)

Business / Finance / Employee Stock Ownership Plan (ESOP): A firm-sponsored program that enables employees to purchase shares of the firm's common stock on a preferential basis. MORE

Cash Balance Plan

Business / Taxes / Cash Balance Plan: A cash balance retirement plan is a defined benefit plan that has many of the characteristics of a defined contribution plan. The benefit that you'll be entitled to builds up as credits to a hypotheti MORE

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