What Are the Advantages and Disadvantages of a Defined-Contribution Plan

question 46

Essay

What are the advantages and disadvantages of a defined-contribution plan like a 401k?

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Definitions:

Promised Action

An agreed-upon deed or activity that a party has committed to perform in the scope of a contract or agreement.

Set of Promises

A collection or aggregation of commitments or assurances made by one party to another within the context of a contract or agreement.

Legal Objective

A principle that requires contracts to have a purpose that is lawful and not against public policy in order to be enforceable.

Breach

The violation or breaking of a law, duty, or contractual obligation either by commission or omission.