A(n) ____ is an IRS-approved retirement plan sponsored by an employer to which employees may make pretax contributions that lower their tax liability.

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A defined-contribution retirement plan is an IRS-approved retirement plan sponsored by an employer where employees can make pretax contributions that lowers their taxable income. Examples of defined-contribution retirement plans include 401(k), 403(b), and 457 plans. Tax-sheltered investments also allow for pretax contributions but are not sponsored by an employer. Pretax income refers to income that has not been taxed yet, while opportunity cost refers to the cost of choosing one option over another.

A(n) ____ Is an IRS-Approved Retirement Plan Sponsored by an Employer