SkipCaptcha, Automoderated users, edit
8,856
edits
Changes
mLine 7:
Line 7: − +
no edit summary
In a defined contribution plan, the amount contributed to the plan is known (or is easily calculated, and may include amounts matched by the employer); what is unknown is the amount the retiree will have upon retirement as it depends on performance of the underlying investment (and it is possible that the amount could be zero, if the investment is in company stock and the company later ceases to exist). They are also usually portable to an extent: usually individual contributions and associated earnings can be taken to another plan (but company matching amounts and associated earnings may only be portable if an employee is "vested" in them, usually requiring a certain amount of time employed). [[Individual retirement account]]s and 401(k) plans are popular types of these plans; in the Federal civil service the [[Thrift Savings Plan]] is the defined contribution portion of the overall retirement system.
In a defined contribution plan, the amount contributed to the plan is known (or is easily calculated, and may include amounts matched by the employer); what is unknown is the amount the retiree will have upon retirement as it depends on performance of the underlying investment (and it is possible that the amount could be zero, if the investment is in company stock and the company later ceases to exist). They are also usually portable to an extent: usually individual contributions and associated earnings can be taken to another plan (but company matching amounts and associated earnings may only be portable if an employee is "vested" in them, usually requiring a certain amount of time employed). [[Individual retirement account]]s and 401(k) plans are popular types of these plans; in the Federal civil service the [[Thrift Savings Plan]] is the defined contribution portion of the overall retirement system.
[[Social Security]] Plans can supplement the pensions of individuals, in addition to other savings that a person may have to fund retirement living.
[[Social Security]] payments can supplement the pensions of individuals, in addition to other savings that a person may have to fund retirement living. However, it will only repay a portion of income (and the higher one's income the lower the percentage).
[[Category:Economics]]
[[Category:Economics]]
[[Category:Retirement]]
[[Category:Retirement]]