Many Americans never noticed it happening, but over the past few decades "defined benefit" retirement plans -- typically, pensions -- have become much less common. They've been replaced by "defined contribution" retirement plans -- typically, 401(k) plans. A defined benefit plan is one that offers retirees a specified benefit in their later years, such as a certain sum per month or year.

A defined contribution plan, however, takes in specified contributions, with future benefits left unclear. In a 401(k) plan, for example, you may be contributing 5% or 10% of your salary every year, building up an account balance that's invested for you. How much you'll be able to withdraw in retirement will depend on how your investments perform.

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Source Fool.com