---
title: Traditional Plan vs. 412(e)(3) Plan - RMC Group
description: Watch this video with Doug Tashma as he explains the difference between a Traditional Defined Benefit Plan and a 412(e)(3) Plan.
---

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# [Traditional Plan vs. 412(e)(3) Plan - RMC Group](https://rmcgp.com/blog/2019/08/07/traditional-plan-vs-412e3-plan)

 Written by [RMC Group](https://rmcgp.com/blog/author/rmc-group) | Aug 7, 2019 6:39:25 PM

[x_video_embed type=”16:9″][/x_video_embed]

 

*[Transcript]*

When you get to 65, you have X-benefit…

$10,000 a month…the number is irrelevant…

You can do the Traditional Plan, provides the same benefit, the $10,000 a month

It’s just how you get there.

You can invest in the market, the market will appreciate more than a very conservative investment in the 412.

So it’s not, the beauty of the 412 as you pass it…

It’s called Fully-Insured cause you pass it on to an insurance company, the liability, but the insurance company says as long as you pay these very conservative premiums…

We will 100% guarantee that for the rest of your life when you get to retirement until you pass away – you can live until you’re 110 – we’re going to pay you that benefit!

Now conversely, in the Traditional Plan – I said it cost $100,000 in a 412, in a Traditional if I have decent market performance, it might only cost me $70,000 a year.

Now conversely though, I can put $70,000 a year away and when I turn 64 the market, we can have a 9/11 event or we can have a Black Friday or whatever it was (Friday I think it was when the market crashed…)

The market can cut in half and then my reserve at 64 cuts in half and now I have one year until I retire to make that up.

So that’s why the conservative nature of the 412, sometimes people really like that!

[View full post](https://rmcgp.com/blog/2019/08/07/traditional-plan-vs-412e3-plan)

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