Although Social Security is the largest source of retirement income for Americans 65 and older, two broad categories of retirement programs have become important sources of supplementary income for prospective retirees: employer-sponsored retirement plans and individual retirement plans. For many years, Americans who worked for large companies could rely on employer-sponsored pension programs, known as defined benefit plans. In a defined benefit plan, the amount of future benefits that an employee receives is based on a formula that takes into account the individual’s salary history and years of service.