For most retirees, a secure and sufficient income stream during retirement is the ultimate goal. Traditionally, this is achieved through either a defined benefit (DB) or defined contribution (DC) plan, where contributions made during work­ing years help build a retirement incom. While DB plans place the respon ibility OD institutions, such as governments or private firms, DC plans shift the burden to inctividuals. Herein lies the challenge — managing retirement funds can be daunting without financial expertise.

DB plans,whilesimple to understand,are in­ creasingly unsustainable,with many undcrfunda ed or in financial distTeSs. Consequently, many DB plans are converting ca DC schemes. In a DC plan, individual accumulate savings over time, which ideally would be converted at retirement into an inflation-indexed life annuity,ensuring a stable income adjusted for cost of living.

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Originally published by The Edge.