Defined Benefit Plans: Money In, Money Out
First, we will look at a Defined Benefit Plan (DB). A DB plan is exactly what the name suggests: It gives you a defined amount of lifetime income. A DB plans gives you the security of knowing exactly what to expect at retirement.
The income you receive when you retire is based on years of service and/or earnings, then calculated by a formula. The formula isn’t a secret—it’s described in the pension documents you receive when you enter the plan.
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