What is a Plan? Index | Next Article A "plan" is shorthand for a "qualified retirement plan", and it's a great way to save money for your future. There are two types of qualified plans: Defined Contribution and Defined Benefit. A Defined Contribution plan typically allows you as a participant to make pre-tax contributions to an investment account from which you can begin making withdrawals upon reaching age 59-1/2. Under a Defined Benefit plan, your employer contributes to the plan to provide you with a monthly benefit you can begin collecting when eligible for retirement. The term "qualified" means that your plan meets certain government standards that allow your contributions (and your employer's contributions) and earnings to remain invested in a tax-favored environment until you begin making withdrawals or collecting benefits. It also means that your personal contributions belong 100% to you and are maintained in your name, separate from your company's other assets.