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What is defined-contribution plans?
Defined-contribution (DC) retirement plans allow employees to invest pre-tax dollars in the capital markets where they can grow tax-deferred until retirement.
Simpler Explained: A defined contribution plan is a common workplace retirement plan in which an employee contributes money and the employer typically makes a matching contribution
Essentially, they are retirement plans that companies may offer as a benefit in which you, your employer or both make contributions on a regular basis.
The most common examples of defined-contribution plans are the 401(k) and the 403(b).
defined-contribution plans - video
