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Since its not common option, its only natural to ask, What is a defined benefit plan?
What Are the Features of a Defined Benefit Plan?
A defined benefit plan guaranteesretirement benefitsfor an employee.
Employers manage this fund, as well as plan and manage investments.
Its a responsibility that employers take on to ensure theres enough money to meet future payouts.
Employees are required to meet a vesting period and entitled to receive lifetime monthly income upon reaching retirement age.
Employer Contributions
In a defined benefit plan, employers are responsible for making contributions to a fund.
Defined Benefit Plan vs.
Defined Contribution Plan
Most are familiar withdefined contribution planslike a 401(k).
You might be wondering how these accounts differ from a defined benefit plan.
Here are some of those:
Who Is Eligible for a Defined Benefit Plan?
You have to meet certain eligibility requirements for a defined benefit plan.
If you decide to change thejobs, it will have an impact on your defined benefit plan.
Although this plan offers stability it does come with some tradeoffs.
Takeaway
Finding and working with a financial advisor is a great idea.
A financial advisor will help keep track of your finances and assist you in attaining your financial goals.
Get to know your financial advisor options today for free!
Get to know your Financial Advisor options today for Free!
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