Final answer:
Defined contribution plans like 401(k)s and 403(b)s require employees and employers to contribute a set amount regularly, are tax-deferred, portable, and help protect against inflation.
Step-by-step explanation:
The type of retirement plan that requires employees to pay a set amount on a regular basis is known as a defined contribution plan. Examples of these plans include 401(k)s and 403(b)s.
where both the employer and employee contribute a fixed amount to the worker's retirement account typically with each paycheck.
These funds can be invested in a variety of investment vehicles and are designed to be tax-deferred and portable, meaning they stay with the individual even if they change employers.
The retiree can access their account after retirement, and the real rates of return on investments can help protect against inflation, which was a significant issue with the earlier defined benefits plans that provided a fixed nominal amount per year.