What are the disadvantages of a defined benefit plan?
- What's a defined benefit plan?
- Can I decide how my money is invested?
- What's the difference between a defined benefit plan and a defined contribution plan?
- What happens when I retire?
- Exactly how much will I get when I retire?
- Am I eligible for a defined benefit plan?
- Just how common are defined benefit plans?
- What if I work for the government?
- What are the advantages of a defined benefit plan?
- What are the disadvantages of a defined benefit plan?
- Can I tap my money early?
- Can I count on the money to be there when I need it?
- Will PBGC payouts be as big as I was counting on?
- Is there insurance on government plans?
- How can I make sure my pension is covered by the PBGC?
You have no say in how the money is invested. Moreover, you can't choose to invest more in the plan. If you want to save more for retirement, you will need to do it elsewhere, such as through an IRA or a 401(k) - if you have one.
And while it's nice to know exactly what you will receive as your payout, some defined benefit plans do not adjust your future payouts to keep pace with inflation.
