Defined Contribution (DC) plans

Defined Contribution (DC) plans are retirement savings programs where employees, and sometimes employers, contribute a set amount of money regularly into an individual account. The final retirement benefit depends on the total contributions made and how well those investments perform over time. Common examples include 401(k) plans in the U.S.. Participants choose how to invest their contributions, bearing the investment risk, with the potential for growth based on market performance. At retirement, the accumulated funds can be withdrawn or converted into income, providing flexibility but also some uncertainty based on investment outcomes.