Michel puts $17,500 into his 401(k)retirement plan each year.This type of retirement plan is a ______.

Question

Quizplus · Accepted Answer

Michel's retirement plan is a defined contribution plan because he is contributing a set amount of money per year. Defined benefit plans, on the other hand, guarantee a specific payment amount upon retirement, regardless of how much the individual contributes. Vesting refers to the process of becoming entitled to full ownership of employer-provided retirement funds. Experience is not a term related to retirement plans.

Michel Puts $17,500 into His 401(k)retirement Plan Each Year