Financial Glossary

A Lump Sum is a single, large payment of money received all at once, rather than in smaller installments over time. In retirement planning, this often refers to taking your entire retirement account balance as [...]

A Mutual Fund is a pooled investment vehicle where many investors combine their money to buy a diversified collection of stocks, bonds, or other securities managed by professional fund managers. Think of it as splitting [...]

A Mega Backdoor Roth IRA is an advanced retirement savings strategy that allows high earners to put more money into a Roth account than usual by using their 401k plan. If the plan allows, you [...]

The S&P 500 is a stock market index that tracks the performance of 500 of the largest publicly traded companies in the United States. It includes well-known businesses across many industries, giving a broad snapshot [...]

Rule 72(t) is an IRS provision that allows you to withdraw money from retirement accounts before the normal retirement age without paying early withdrawal penalties. It requires you to take substantially equal periodic payments (SEPP) [...]

Required Beginning Date (RBD) is the IRS-mandated deadline by which you must start taking required minimum distributions (RMDs) from certain tax-deferred retirement accounts, such as traditional 401(k)s and IRAs. It’s essentially the government’s way of [...]

Recharacterization is the process of changing a retirement account contribution from one type to another, treating it as if the contribution had originally been made to the new account type. This only applies to contributions—not [...]

Rebalancing is the process of adjusting your investment portfolio back to your original target mix of different asset types like stocks, bonds, and cash. Over time, some investments grow faster than others, throwing off your [...]

Qualified Longevity Annuity Contract (QLAC) is a special type of annuity you can purchase inside your retirement account that’s designed to provide guaranteed income later in life, typically starting around age 80-85. Think of it [...]