Share
Explore BrainMass

Compare and contrast common types of retirement plans

Compare and contrast the three common types of retirement plans offered by employers, and indicate whether they are contributory or noncontributory plans. What are the advantages and disadvantages of each one to the employee and to the employer?

Solution Preview

There are actually more than three types of retirement plans, and their features make each type unique. Three of the most commonly used types of retirement plans offered by employers are defined benefit plans, 401k and profit sharing plans, and plans with IRAs. A defined benefit plan "promises a specified monthly benefit at retirement" (DOL, 2012). The actual benefit amount is determined by the formula used during the life of the plan. The main disadvantages to this type of plan are that it is costly to set-up ...

Solution Summary

Compare and contrast the three common types of retirement plans offered by employers, and indicate whether they are contributory or noncontributory plans. What are the advantages and disadvantages of each one to the employee and to the employer?

$2.19