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Many companies are transitioning their retirement programs from defined benefit plans, such as pension plans, to defined contribution plans, such as 401Ks. This puts the employee in a much more active situation. Instead of paying a fixed amount and having a predetermined, and guaranteed benefit, you decide how much to put in to your plan. You must also manage your account to ensure that it performs well. You have no guarantees and the lifestyle you’ll be able to afford in retirement is entirely up to you.