📖 Glossary
500 money, math, and health terms explained in plain English — each with an example and a free calculator.
45 terms found in Retirement & Savings. Clear filters
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4% Rule
The 4% rule is a retirement planning guideline based on historical US market studies, which found that…
401(k) Plan
A 401(k) is an employer-sponsored retirement savings plan in the United States that lets employees contribute…
403(b) Plan
A 403(b) plan is a US tax-advantaged retirement savings plan for employees of public schools, certain…
457(b) Plan
A 457(b) plan is a US tax-advantaged deferred compensation plan offered mainly to state and local government…
529 Plan
A 529 plan is a US tax-advantaged savings account designed for education expenses. Investment growth is…
A
Annuity
An annuity is a contract, usually with an insurance company, in which a person pays a lump sum or series of…
APY (Annual Percentage Yield)
APY (annual percentage yield) is the actual yearly rate of return on a deposit once compounding is included…
B
Backdoor Roth IRA
A backdoor Roth IRA is a strategy used by people whose income is too high to contribute directly to a Roth…
Beneficiary
A beneficiary is a person or organization named to receive assets — such as money in a retirement account…
C
Catch-Up Contribution
A catch-up contribution is an extra amount that people aged 50 or older can contribute to certain US…
Certificate of Deposit (CD)
A certificate of deposit (CD) is a bank deposit that pays a fixed interest rate for a fixed term, such as six…
Compound Interest
Compound interest is interest calculated on both the original principal and on interest that has already been…
Contribution Limit
A contribution limit is the maximum amount that can be added to a tax-advantaged account in a year. In the…
D
E
Early Withdrawal Penalty
An early withdrawal penalty is a charge for taking money out of an account before a specified time. For US…
Emergency Fund
An emergency fund is money set aside specifically to cover unexpected expenses or a loss of income, such as a…
Employer Match
An employer match is a contribution an employer makes to an employee's retirement account, such as a 401(k)…
F
FDIC Insurance
FDIC insurance is protection provided by the US Federal Deposit Insurance Corporation for deposits at member…
FIRE (Financial Independence, Retire Early)
FIRE (financial independence, retire early) is a movement built around saving a large share of income so that…
Full Retirement Age
Full retirement age (FRA) is the age at which a person can receive 100% of their Social Security retirement…
H
Health Savings Account (HSA)
A health savings account (HSA) is a US tax-advantaged account for people enrolled in a qualifying…
High-Deductible Health Plan (HDHP)
A high-deductible health plan (HDHP) is a US health insurance plan with a higher deductible and typically…
High-Yield Savings Account
A high-yield savings account is a savings account that pays a notably higher interest rate than the national…
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R
Required Minimum Distribution (RMD)
A required minimum distribution (RMD) is the minimum amount the IRS requires owners of certain tax-deferred…
Retirement Account Rollover
A rollover is the transfer of money from one retirement account to another — for example, from a former…
Roth 401(k)
A Roth 401(k) is a type of employer retirement plan contribution made with after-tax money. Contributions do…
Roth Conversion
A Roth conversion moves money from a pre-tax retirement account, such as a traditional IRA or 401(k), into a…
Roth IRA
A Roth IRA is a US individual retirement account funded with after-tax money. Contributions are not…
Rule of 55
The rule of 55 is a US tax provision that lets workers who leave their job in or after the calendar year they…
S
Saver’s Credit
The Saver’s Credit (Retirement Savings Contributions Credit) is a US tax credit for low- and…
Savings Account
A savings account is a deposit account at a bank or credit union that holds money and pays interest, usually…
Savings Rate
A savings rate is the percentage of income that is saved rather than spent over a period. It is commonly…
SEP IRA
A SEP IRA (Simplified Employee Pension) is a US retirement plan that lets self-employed people and small…
SIMPLE IRA
A SIMPLE IRA (Savings Incentive Match Plan for Employees) is a US retirement plan for small employers…
Social Security Benefits
Social Security benefits are monthly payments from the US Social Security program to eligible retirees…
Solo 401(k)
A solo 401(k), or individual 401(k), is a US retirement plan for self-employed people and business owners…
Spousal IRA
A spousal IRA lets a married person with little or no earned income contribute to their own IRA based on…
T
Target-Date Fund
A target-date fund is a mutual fund or ETF designed around an expected retirement year, such as 2050. It…
Tax-Deferred
Tax-deferred means that taxes on money, or on its investment earnings, are postponed until a later date…
Traditional IRA
A traditional IRA is a US individual retirement account in which contributions may be tax-deductible and…
Treasury Bill (T-Bill)
A Treasury bill (T-bill) is a short-term US government debt security with a maturity of one year or less…
V
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Definitions are for general educational purposes only and are not financial, tax, legal, or medical advice.