Retirement Glossary

A 401(k) is a retirement savings account offered by many employers that lets workers set aside a portion of their […]

A 403(b) is a tax-advantaged retirement savings plan offered by certain employers, including public schools, nonprofit organizations, and some hospitals. […]

An annuity is a financial contract between a person and an insurance company. The person makes either a lump-sum payment […]

Asset allocation is the process of dividing your investment portfolio among different types of assets, such as stocks, bonds, and […]

A beneficiary is a person or entity designated to receive the assets from a retirement account, life insurance policy, or […]

A catch-up contribution is an extra amount of money that workers aged 50 and older are allowed to add to […]

A contribution limit is the maximum amount of money the IRS allows you to put into a tax-advantaged retirement account […]

A Cost of Living Adjustment, commonly called a COLA, is an increase applied to retirement benefits or income to help […]

A defined benefit plan is a type of employer-sponsored retirement plan that promises workers a specific monthly payment when they […]

A defined contribution plan is a workplace retirement account where the employee, the employer, or both make regular contributions. Unlike […]

An early withdrawal penalty is a fee charged by the IRS when you take money out of a retirement account […]

An employer match is a contribution your employer makes to your workplace retirement account, such as a 401(k), based on […]

An expense ratio is the annual fee that a mutual fund, index fund, or exchange-traded fund (ETF) charges investors to […]

A fiduciary is a person or organization that is legally required to act in your best financial interest. When someone […]

Full Retirement Age (FRA) is the age at which you qualify for 100% of your Social Security retirement benefit, based […]

An IRA, or Individual Retirement Account, is a personal savings account that offers tax advantages to help people save money […]

A pension is a retirement plan where an employer promises to pay a worker a regular monthly income for life […]

Profit sharing is a type of employer-sponsored retirement plan that allows a company to contribute a portion of its profits […]

Rebalancing is the process of realigning the mix of investments in a retirement portfolio back to its original or target […]

A Required Minimum Distribution (RMD) is the minimum amount of money the IRS requires you to withdraw from certain retirement […]

A rollover is the process of moving money from one retirement account to another without paying taxes or penalties on […]

A Roth conversion is the process of moving money from a traditional IRA or other pre-tax retirement account into a […]

A Roth IRA is an individual retirement account that allows your money to grow tax-free. Unlike a traditional IRA, contributions […]

A SEP IRA, which stands for Simplified Employee Pension Individual Retirement Account, is a type of retirement savings account designed […]

A SIMPLE IRA (Savings Incentive Match Plan for Employees Individual Retirement Account) is a retirement savings plan designed for small […]

Social Security is a federal government program that provides monthly income payments to retired workers, disabled individuals, and certain family […]

A target date fund is a type of mutual fund designed to be a simple, all-in-one retirement investment. You pick […]

Tax-deferred means you do not pay income taxes on money right away. Instead, the taxes are postponed until a later […]

A Traditional IRA (Individual Retirement Account) is a personal savings account that lets you set aside money for retirement while […]

Vesting is the process by which an employee earns the right to keep employer contributions made to their retirement account. […]