A fuller guide to this term is on the way. In the meantime, the related terms below explain the ideas around it.
Related MoneyPedia terms
- Defined Benefit PlanAn employer plan that promises a specific retirement payout, with the company bearing the responsibility for funding it.
- AnnuityA contract with an insurance company that converts a sum of money into a stream of steady payments over time.
- VestingThe process of earning full ownership of employer-contributed retirement money, often requiring you to stay for a set number of years.
- Lump-Sum DistributionTaking your entire retirement benefit as one large payment instead of receiving it as monthly income over time.
- Cost-of-Living Adjustment (COLA)A yearly increase to benefits like Social Security or pensions that helps your income keep pace with inflation.
- Defined Contribution PlanA retirement plan like a 401k where you and your employer contribute, and your payout depends on investment performance.
More in Retirement
Plain-English education — not personalized legal, tax, or investment advice.