Defined Benefit Plan
Do you know the definition of a defined benefit plan? Or when it is useful to have a cash balance plan versus a different savings plan? Learn all your options now with Better Business Planning!
A defined benefit plan is a type of retirement plan. If you are looking into all the different options available when it comes to retirement plans, these are definitely something you should consider.
On average, when people think of retirement plans, they consider defined contribution plans. In these examples, you define the amount of money (or the percentage of your paycheck) you wish to put toward retirement. With a defined benefit plan, the participant instead defines the amount of money they wish to be provided monthly at the time of retirement. Using this number, the contributions made to the account are calculated.
Typically, this type of plan is most effective for those employees that wait longer than normal to begin planning for retirement. Most defined or cash balance plans are begun by individuals aged 45 or over. In some instances, though, a defined benefit plan can be useful for younger individuals.
If you would like to speak to an expert about your retirement, and if a defined benefit or cash balance plan is right for you, simply fill out our online quote form or call our office today. At Better Business Planning, our agents are always happy to speak with you about your retirement plans.