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Defined-Contribution Plan |
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Defined-Contribution Plan A retirement plan in which the employee and/or employer make a set dollar amount in contribution each month. The benefits of a defined-contribution plan are not set, and depend upon how well the contributions are invested before the pensioner starts to make withdrawals. The disadvantage of a defined-contribution plan is the possibility that the investments will not perform as well as expected, giving the pensioner a less secure retirement. Its advantage is that the pensioner, while still making contributions, has the ability to determine — to a certain extent — how the contributions are invested. See also: 401(k). How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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