Michelle puts $17,500 into her 401(k) retirement plan each year.This type of retirement plan is a ________.

Question

Quizplus · Accepted Answer

Michelle's 401(k) retirement plan is a defined contribution plan, where she contributes a fixed amount each year. The opposite is defined benefit plans, where the retirement benefit is predetermined based on factors such as years of service and salary. Vesting refers to the employee's right to the employer's contribution to the retirement plan over time, and experience is not related to retirement plans.

Michelle Puts $17,500 into Her 401(k) Retirement Plan Each Year