A problem with defined contribution plans is that they are vulnerable to big fluctuations.

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Defined contribution plans, such as 401(k)s, are vulnerable to big fluctuations because the value of the plan is tied to the performance of the underlying investments. If the investments perform poorly, the plan value will decrease, potentially leaving the plan participant with less retirement savings than expected. Conversely, if the investments perform well, the plan value will increase. This uncertainty and volatility can pose a risk to retirement planning.

A Problem with Defined Contribution Plans Is That They Are