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| is a term used by companies to mean reducing the number of employees. one way this is done is to offer early retirement to some workers. |
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Term
| qualified retirement accounts |
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Definition
| are designated by the IRS for special treatment, such as tax-deferred growth, while funds remain in the account. an example of a ____ is an IRA |
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Term
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| is the term the IRS uses to designate how money coming out of most retirement plans will be taxed. it means the funds will be taxed as if you earned them as salary, which in most cases is what happened, but the tax was deferred to this later date |
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Definition
| is a rise in the cost of goods and services with a corresponding decrease in the value of money |
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Definition
| reduce the risk by spreading investment dollars over numerous stocks and or bonds to minimize the impact should one of the investments turn bad |
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| is your pay or salary before any taxes, insurance payments or any other deductions are made |
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| is what your dollars will buy relative to another point in time. inflation reduces purchasing power by raising prices, thus your dollar is worth less this year than it was last year |
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| addresses the concept that a dollar today is better than a dollar tomorrow. you can invest a dollar today and it will earn interest. a dollar tomorrow is worth less than a dollar today thanks to inflation |
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Definition
| is the mathematical means by which interest earned during one period adds to the principal, then the next period interest is earned on the resulting principal plus interest in the first period. another way to say this is interest earning interest. |
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Term
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Definition
| is the social security, medicare, and income tax withheld each payday by your employer. your employer matches your contribution to social security and medicare |
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Term
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Definition
| is a medical situation that existed before you applied for any type o insurance. it is usually a chronic condition and may affect your ability to obtain insurance |
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Term
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Definition
| calculate retirement benefits using a formula that applies a percentage to an average salary (usually the last five years or the best five years of compensation) and adds in a longevity bonus for the number of years worked. this gives employees a monthly benefit for the rest of their lives |
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Term
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Definition
| are similar to defined benefit plans except there is no reward for longevity and employees can take the plan with them if they change jobs |
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Term
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Definition
| is a contract with a life insurance company guaranteeing a certain payout over a period. it may contain a death benefit that would pay a survivor in the case of death |
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Term
| defined contribution plans |
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Definition
| provide the employee an opportunity to invest pre-tax money deducted on a regular basis in a group of mutual funds and other investments. the employer may match part of the employee contribution, but is not required to by law. the employee will only know how much is contributed to the plan. the ultimate benefit at retirement will depend on how well the employee's choices of investments performed |
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Term
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Definition
| is a qualified defined contribution plan offered by employers. it allows employees to have a certain percentage for their salary deducted and invest in the plan. the deduction is pre-tax, so employees experience a reduction in current income tax. the deposits and earnings are tax deferred until withdrawn in retirement |
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Term
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Definition
| is the retirement plan for religious, educational, and other nonprofit groups. this plan may use tax-deferred annuities instead of mutual funds |
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