Benefits And Benefits Of Retirement Program

2094 WordsMar 7, 20169 Pages
Defined Benefit or Defined Contribution When we are young we tend to not think about the future and what we can do today to ensure we are able to maintain a comfortable lifestyle. Financial planning is extremely important to all of us whether we are wanting a new boat in the near future or a retirement home in Arizona. As a young adult entering the workforce straight out of high school or a recent college graduate, choices will be made as to the type of career you will follow, the location of employment, the employer and the starting wages – all of these will affect our financial future. Some decisions are made for us, such as what type of retirement program(s) are offered by our employer, will you enroll or do they offer them at all. Since the turn of the century it is no longer commonplace for someone to start their employment career and end it with the same employer. Therefore, when researching a future employer, understanding the retirement plans of a defined benefit or a defined contribution plan are enormously important to future financial security. The benefits and shortfalls differences Retirement Plans Defined Benefit Plan Values of the plan. A defined benefit plan (DB) allows the employee to know exactly how much money they will receive during their retirement years. In the article Defined benefit pension decline: The consequences for organizations and employees the authors state the total gained from the plan defined and obvious. The employer agrees to
Open Document