00:01
So here we're differentiating between defined benefit and defined contribution plans, right? and the idea of a defined benefit is that there is a guaranteed payout.
00:12
For defined contribution, there is only a guaranteed contribution, right? so in the first one, the employer pledges to pay you so much when you're retired.
00:24
In the second one, the employer pledges to put so much into an investment with your name on it and whatever happens to the investment happens.
00:34
So let's go through each of these.
00:36
Both long term, that is correct, right? because they are for retirement, right? in both cases, you're trying to get them to last 50 years.
00:51
Untaxed pre -retirement.
00:55
This is correct.
00:57
They are almost always tax sheltered, right? now, this is just accounting law, right? but the basic idea is that although you are getting the right to the income, you're not actually receiving the income...