There are various ways to build up retirement savings. Some workers can take advantage of employer plans that offer either defined benefits (i.e. a pension or cash balance plan) or defined contributions (i.e. a 401(k), 403(b), 457 or Thrift Savings Plan). Some may need or want to make savings into their own funds such as IRAs or annuities. Working out how to save for retirement as early in life as possible may make it easier to build sufficient funds to live on once retired. How do people save for retirement?
How to Save for Retirement: Defined Benefit Plans
Some companies will offer pensions and cash balance plans to their employees. These accounts shift savings responsibility to the employer rather than the worker and aim to provide a regular income in retirement or a lump sum payment (or a combination of the two). This can represent a heavy financial burden/risk and these plans are no longer as commonly offered as in the past. This is still held to be one of the easiest and cheapest ways for employees to save for retirement, however, as they don't need to make their own contributions to a defined benefits plan.
