Unlike defined-benefit plans, employee-sponsored defined-contribution plans don't guarantee a specific dollar amount at retirement. How much you receive depends on how much you and your employer contributed and how well your investments performed over the years. Your contributions, as well as your employer's (if any), are always kept in an individual account in your name.

With defined-contribution plans, you're in the driver's seat when it comes to deciding how your money will be invested. You'll choose from a variety of stock or bond mutual funds, guaranteed funds, annuities, cash equivalents such as money market accounts, or your company's stock. Your plan will stipulate how frequently you can change your investment choices. Many plans allow you to manage your account online and make investment changes as often as you like.

One of the attractive features of defined-contribution plans is that they're portable. If you change jobs, you can take your money with you. The following are the most common defined-contribution plans:

• 401(k) plans, offered by private companies

• 403(b) plans, offered by nonprofit, tax-exempt employers, such as schools and colleges, hospitals, museums, and foundations

• 457 plans, offered by federal, state, and local government agencies and nonprofit organizations

Other defined-contribution plans include ESOPs, money purchase plans, profit-sharing plans, simplified employee pension (SEP) plans, savings incentive match plans (SIMPLEs), and thrift or savings plans (TSPs).

These plans all have one important thing in common: you pay no taxes on your contributions or your earnings until you withdraw the money.