Retirement Planning Financial Terms & Definitions

27 terms in this topic

Retirement planning involves identifying sources of income, estimating expenses, implementing a savings program, and managing assets and risk. It also includes projecting future cash flows to ensure financial independence in retirement.

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401(k)

A 401(k) is a tax-advantaged retirement savings plan sponsored by an employer. It allows employees to save and invest a…

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403(b)

A 403(b) plan is a tax-advantaged retirement savings account designed specifically for employees of certain tax-exempt organizations, such as public…

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457 plan

A 457 plan is a type of tax-advantaged retirement savings account offered to employees of state and local governments, as…

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ERISA

ERISA, the Employee Retirement Income Security Act of 1974, is a landmark federal law that sets minimum standards for most…

Full Definition
401(k) A 401(k) is a tax-advantaged retirement savings plan sponsored by an employer. It allows employees to save and… 403(b) A 403(b) plan is a tax-advantaged retirement savings account designed specifically for employees of certain tax-exempt organizations, such… 457 plan A 457 plan is a type of tax-advantaged retirement savings account offered to employees of state and local… Backdoor Roth A Backdoor Roth is a legal strategy that allows high-income earners to contribute to a Roth IRA, even… Catch-up contribution A catch-up contribution is an additional retirement savings contribution that individuals aged 50 or older are allowed to… Contribution limit A contribution limit is the maximum amount of money that an individual or their employer can legally deposit… Deferred annuity A deferred annuity is a type of retirement savings contract offered by insurance companies. With a deferred annuity,… Defined benefit plan A defined benefit plan, often called a pension plan, is an employer-sponsored retirement plan that guarantees a specific,… Defined contribution plan A defined contribution plan is a retirement savings plan where the employer, employee, or both make regular contributions… Early withdrawal penalty An early withdrawal penalty is a fee imposed by the Internal Revenue Service (IRS) when you take money… Employer match An employer match is a contribution made by an employer to an employee’s retirement savings plan, typically a… ERISA ERISA, the Employee Retirement Income Security Act of 1974, is a landmark federal law that sets minimum standards…