Term
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Definition
| An investment fund that raises funds, pools the money, and invests it in stocks, bonds, and other investments. Each investor owns a share of the fund proportionate to the amount of his or her investment. |
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Term
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Definition
| a firm that invests the pooled money of a number of investors in return of a fee |
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Term
| Open-End Investment Company or Mutual Fund |
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Definition
| A mutual fund that has the ability to issue as many shares as investors want. The value of all the investments that the fund holds determines how much each share in the mutual fund is worth. |
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Definition
| The dollar value of a share in a mutual fund. It's the value of the fund's holdings (minus any debt) divided by the number of shares outstanding. |
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Term
| Closed-End Investment Company or Mutual Fund |
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Definition
| A mutual fund that can't issue new shares. These funds raise money only once by issuing a fixed number of shares, and thereafter the shares can be traded between investors. The value of each share is determined by the value of the investments the fund holds and what investors demand for the shares in the fund. |
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Definition
| A fixed Pool of Securities, generally municipal bonds, in which each share represents a proportionate ownership interest in that pool. The bonds are purchased and then held until maturity, at which time the trust is dissolved. |
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Term
| Real Estate Investment Trust or RETI |
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Definition
| An investment vehicle similar to a mutual fund that specializes in real estate investments, such as shopping centers or rental property, or that makes real estate loans. |
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Definition
| a sales commission charged on a mutual fund |
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Term
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Definition
| A mutual fund on which a load or sales commission is charged. |
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Definition
| A commission that's charged only when the investor liquidates his or her holdings. |
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Definition
| A mutual fund that doesn't charge a commission. |
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Term
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Definition
| The ratio of a mutual fund's expenses to its total assets. |
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Definition
| A measure of the level of a funds trading activity, indicating what percentage of the funds investments are turned over during the year. |
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Term
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Definition
| An annual fee, generally ranging from 0.25% - 1.00% of a fund's assets that the mutual fund charges its shareholders for marketing costs. |
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Term
| Money Market Mutual Funds |
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Definition
| Mutual funds that invest in Treasury Bills, certificates of deposit, commercial paper, and other short term notes generally with a maturity of less than 30 days. |
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Term
| Tax-Exempt Money Market Mutual Fund |
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Definition
| A money market mutual fund that invest only in very short-term municipal debt. |
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Term
| Government Securities Money Market Mutual Fund |
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Definition
| A money market mutual fund that invests solely in U.S. government securities in order to avoid any risk whatsoever. |
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Term
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Definition
| Mutual funds that invest primarily in common stock. |
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Term
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Definition
| A mutual fund that tries to "balance" the objectives of long-term growth, income, and stability. To do this these funds invest in a mix of common stocks and bonds as well as preferred stock in some cases. |
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Term
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Definition
| A mutual fund that invests in a mix of stocks and money market securities. |
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Definition
| Mutual funds that try to tailor their holdings to the investor's individual characteristics, sch as age and risk tolerance. |
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Term
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Definition
| A mutual fund professionally managed for an investor's stage of retirement with the investments in the fund automatically growing more conservative as the investors retirement date nears. |
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Term
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Definition
| Mutual funds that invest primarily in bonds. |
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Term
| ETFs or Exchange Traded Funds |
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Definition
| A hybrid between a mutual fund and an individually traded stock or bond that trade on an exchange just as individual securities do and can be bought and sold throughout the trading day. |
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Term
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Definition
| A description of the mutual fund including the funds objectives and risks, its historical performance, its expenses, the manager's history, and other information. |
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Term
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Definition
| A traditional pension plan in which you receive a promised or "defined" pension payout at retirement. The payout is based on a formula that takes into account your age at retirement, salary level, and years of service. |
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Term
| Noncontributory Retirement Plan |
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Definition
| A retirement plan in which the employer provides all the funds and the employee need not contribute. |
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Term
| Contributory Retirement Pln |
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Definition
| A retirement plan in which the employee possibly with the help of the employer provides the funds for the plan. |
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Term
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Definition
| A pension fund provision that allows employees to retain and transfer any pension benefits already earned to another pension plan if they leave the company. |
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Term
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Definition
| To gain the right to the retirement contributions made by your employer in your name. In the case of a pension plan, employees become vested when they've worked for a specified period of time and thus gained the right to pension benefits. |
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Term
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Definition
| A pension plan in which the employer makes pension contributions directly to a trustee who holds and invests the employees' retirement funds. |
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Term
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Definition
| A pension plan in which the benefits are paid out of current earnings on a pay-as-you-go basis. |
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Term
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Definition
| A retirement plan in which workers are credited with a percentage of their pay, plus a predetermined rate of interest. |
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Term
| Defined Contribution Plan |
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Definition
| A pension plan in which you and your employer alone contributes directly to a retirement account set aside specifically for you. In effect a defined-contribution plan can be through of as a savings account for retirement. |
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Term
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Definition
| A pension plan in which the company's contributions vary from year to year depending on the firm's performance. The amount of money contributed to each employee depends on the employee's salary level. |
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Term
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Definition
| A pension plan in which the employer contributes a set percentage of the employee's salaries to their retirement plans annually. |
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Term
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Definition
| A pension plan in which the employer matches a percentage of the employee's contributions to their retirement accounts. |
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Term
| Employee Stock Ownership Plan or ESOP: |
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Definition
| A retirement plan in which the retirement funds are invested directly in the company's stock. |
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Term
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Definition
| A tax deferred retirement savings plan in which employees of private corporations may contribute a portion of their wages up to a maximum amount set by law ( of $15,500 in 2008 and thereafter these limits will rise with inflation in $500 increments). Employers may contribute a full or partially matching amount, and may limit the proportion of the annual salary contributed (typically to 15%). |
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Term
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Definition
| A tax deferred retirement plan that's essentially the same as a 401 k plan except that it's aimed at employees of schools and charitable organizations. |
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Term
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Definition
| A tax sheltered retirement plan for self-employed. |
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Term
| Simplified Pension Plan or SEP-IRA |
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Definition
| A tax-sheltered (you don't pay taxes on any earnings while they remain in the plan) retirement plan aimed at small businesses or at the self-employed. |
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Term
| Savings Incentive Match Plan for Employees or SIMPLE Plan |
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Definition
| A tax-sheltered retirement plan aimed at small businesses or the self-employed that provides for some matching funds by the employer to be deposited into the employee's retirement account. |
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Term
| Individual Retirement Account or IRA |
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Definition
| A tax advantaged retirement account. The contributing may or may not be tax-deductible, depending on the individual's income level and whether he or she or his or her spouse is covered by a company retirement plan. |
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Term
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Definition
| An IRA in which contributions are not tax deductible. That is you'd make your contribution to this IRA out of after-tax income. But once the money is in there it grows tax free and when it is withdrawn, the withdrawals are tax free. |
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Term
| Coverdell Education Savings Account or Education IRA |
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Definition
| An IRA that works just like a Roth IRA, except with respect to contributions. Contributions are limited to $2,000 annually per child for each child younger than 18, with income limits beginning at $95,000 for single taxpayers and $190,000 for couples. The earnings are tax free and there is no tax on withdrawals to pay for education. |
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Term
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Definition
| Tax advantage savings plans used only for college and graduate school. |
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Term
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Definition
| An annuity in which you receive a set monthly payment for your entire life. |
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Term
| Annuity for Life or a "Certain Period" |
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Definition
| A single life that allows you to receive your payments for a fixed period of time. Payments will be made to you for the remainder of your life, but if you die before the end of the time period (generally 10 to 20 years); payments will continue to be made to your beneficiary until the end of the period. |
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Term
| Joint and Survivor Annutiy |
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Definition
| An annuity that provides payments over the life of both you and your spouse. |
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Term
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Definition
| A payment in which you receive all your benefits in one single payment. |
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Term
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Definition
| The process of planning for what happens to your accumulated wealth and your dependents after you die. |
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Term
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Definition
| An estate and gift tax credit that in 2009, allows the first $3.5 million of an estate and lifetime gifts (beyond that annual gift exclusion) to be passed on tax free. |
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Term
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Definition
| A tax on wealth and property transfers to a person two or more generations younger than the donor. |
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Term
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Definition
| A legal document that describes how you want your property to be transferred to others after your death. |
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Term
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Definition
| An individual who is willed your property. |
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Term
| Executor or Personal Representative |
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Definition
| An individual who is responsible for carrying out the provisions of your will and managing your property until the estate is passed on to your heirs. |
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Term
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Definition
| An individual who'll care for any children under the age of 18 and manage their property. |
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Term
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Definition
| The legal procedure that establishes the validity of a will and then distributes the estates assets |
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Term
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Definition
| An attachment to a will that alters or amends a portion of the will |
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Term
| Letter of last instructions |
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Definition
| A letter generally to your surviving spouse that provides information and directions with respect to the execution of the will. |
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Term
| Durable Power of Attorney |
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Definition
| A document that provides for someone to act on your behalf in the event that you become mentally incapacitated. |
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Term
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Definition
| A directive to a physician that allows you to state your wishes regarding life support and other measures to extend your life. |
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Term
| Durable Health Care Power of Attorney |
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Definition
| A document that designates someone to make life support decisions for you if you lose your capacity to decide |
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Term
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Definition
| A type of ownership limited to married couples. Property held this way can be transferred only if both the husband and the wife agree. In addition, upon the death of one of, the property automatically passes directly to the survivor. |
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Term
| Joint Tenancy with the Right of Survivorship |
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Definition
| A type of ownership in which two or more individuals share the ownership of assets usually in a joint account at a bank or a brokerage firm. When one joint owner dies, the ownership passes directly on to the surviving owners, bypassing the will. |
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Term
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Definition
| A type of ownership in which two or more individuals share ownership of assets. When one of the owners dies, that owner's share isn't passed on to the other owners, It becomes part of the deceased's estate and is distributed according to the deceased's will. |
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Definition
| Property acquired during marriage (depends on US state law) |
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Term
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Definition
| A legal entity in which some of your property is held for the benefit of another person. |
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Term
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Definition
| A trust created during you life. |
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Term
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Definition
| A trust in which you control the assets in the trust and can receive income from the trust without removing assets from the estate. |
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Term
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Definition
| A trust in which you relinquish title and control of the assets when they are placed in the trust. |
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Term
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Definition
| A trust created by your will which becomes active after you die. |
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Term
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Definition
| A trust established to transfer assets to your children while allowing the surviving spouse, the remaining funds in the trust if necessary. Upon the death of the surviving spouse, the remaining funds in the trust are distributed to the children tax free. |
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Term
| Qualified Terminable Interest Property Trust (Q-TIP) |
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Definition
| A trust that gives the individual establishing the trust the ability to direct income from the trust to his or her spouse over the spouses life and then at the spouses death to chose to whom the assets go. |
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Term
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Definition
| A trust that distributes income according to need rather than to some preset formula. The trustee is given discretion to determine who needs what among the designated beneficiaries and the "sprinkles" the income among them according to need. |
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