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Home Categories Retirement Planning A defined benefit plan is an employer-based program that pays benefits based on factors such as years of service and salary history. Defined contribution (DC) pension plans allow employees to invest pre-tax dollars in capital markets where they can grow with tax deferral until retirement. In-kind distributions are payments made in an alternative format, such as property or shares, rather than cash. An Education IRA is a tax-favored savings account used to pay for children’s education expenses. An elective deferral is a portion of an employee’s salary that is withheld and transferred to a retirement plan such as a 401(k). ERISA is a federal law that sets standards for certain employer-sponsored retirement plans and rules for plan trustees. An Employee Share Ownership Plan (ESOP) is an employee compensation plan that gives employees ownership of the company in the form of shares. The equivalent annual annuity is one of two methods used in capital budgeting to compare mutually exclusive projects with unequal lives. Estate planning involves determining how a person’s assets will be preserved, managed and distributed after death or in case they become incapacitated. Financial Independence, Early Retirement (FIRE) is a financial movement based on frugality and extreme savings and investments.