With which of the following plans will you be able to most accurately predict your retirement income?

Question 41 options:

401(k)

403-b

Traditional IRA

Defined benefit plan

1 answer

The plan that will allow you to most accurately predict your retirement income is the Defined Benefit Plan.

Defined benefit plans provide a specific payout at retirement, usually based on factors such as salary history and years of service. Because the benefits are predetermined and based on a formula, you can have a clear understanding of what your retirement income will be.

In contrast, 401(k), 403(b), and Traditional IRA plans are defined contribution plans, where the retirement income depends on the contributions made and investment performance, making them more difficult to predict accurately.