Defined Contribution Plans

What this video covers

• Why the employee bears 100% of the investment risk in a defined contribution plan, and why there is no Pension Benefit Guaranty Corporation (PBGC) insurance backing it
• The 2026 401(k) numbers cold: $24,500 base elective deferral, $8,000 age-50 catch-up, $11,250 SECURE 2.0 super catch-up for ages 60 to 63, and the $72,000 total annual addition ceiling
• Why employer matching contributions do NOT reduce the employee's $24,500 personal deferral limit, only the $72,000 total cap
• The SECURE 2.0 Roth catch-up rule: employees with prior-year Federal Insurance Contributions Act (FICA) wages above $150,000 must make catch-ups on a Roth after-tax basis
• Who qualifies for a 403(b), also called a tax-sheltered annuity (TSA): public schools, churches, and 501(c)(3) organizations only, and why a 501(c)(6) trade association is disqualified
• The 403(b) 15-year service catch-up ($3,000 per year, $15,000 lifetime), and why it stacks on top of the age-based catch-ups in the same year
• The profit-sharing vs. money purchase pension distinction: discretionary contributions with no profit requirement vs. a mandatory fixed percentage of compensation every year