Retirement plans rank in tax generosity from defined benefit down to IRAs

Evidence

If we think of retirement accounts as a pyramid (the way we did with higher education), then the best, those at the top, are defined benefit plans, followed by employer-matching defined contribution accounts. At the bottom are IRAs: They’re available to anyone with earned income, but employees are responsible for funding them and paying any fees associated with them. Over the last few decades, the percentage of employees covered by defined contribution as opposed to defined benefit plans has significantly increased—from 41 percent in 1985 to 61.3 percent in 2010, according to my research. — Dorothy A. Brown, The Whiteness of Wealth, 363

Categorization

• DEFINE: Lays out the retirement-account pyramid (defined benefit, employer-match defined contribution, IRA) that structures the whole chapter’s benefit hierarchy.