Term
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Definition
| the value to which an amount today will grow if it earns a specific rate of interest over a given period. It can be used to find the yearly savings needed to accumulate a given future amount of money. |
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Term
| Whats a contribution plan? |
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Definition
| A pension plan that defines the current pension plan contribution. Future retirement benefits are dependent upon the underlying investments in the retirement fund. |
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Term
| what is time value of money? |
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Definition
| the concept that a dollar today is worth more than a dollar received in the future; this true as long as one can earn a positive rate of return (interest rate) of investments |
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Term
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Definition
| a fixed sum of money that occurs annually |
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Term
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Definition
| the value today of an amount to be received in the future; it is the amount that would have to be invested today at a given interest rate over a specified time period to accumulate late the future amount |
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Term
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Definition
| the process of finding present value; the inverse of compounding to find future value |
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Term
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Definition
if you take 72 and divide by the percentage of your interest, you'll get an approximation for how long it'll take for your money to double (in years)
e.g. 8% interest, (72/8) your money will double in approx nine yearsfuture value |
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Term
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Definition
| A pension plan that specifies the monthly benefit you will receive at retirement age. |
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Term
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Definition
| Pensions benefits that have been accumulated because of previous credited service. |
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Term
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Definition
| Pension benefits that you are entitled to receive regardless of future employment. |
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Term
| wats normal retirement age? |
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Definition
| The age at which you are entitled to full retirement benefits. |
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Term
| wats early retirement age? |
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Definition
| The earliest age at which you can retire with reduced benefits. |
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Term
| wats the flat benefit method? |
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Definition
| Pension benefits are equal to a specified percentage of compensation or a specific dollar benefit. |
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Term
| what's the unit benefit method? |
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Definition
| Pension benefits depend directly upon units of credited service. |
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Term
| wats the 401(k) salary-reduction plan? |
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Definition
| A savings plan that permits earners to defer the taxability of income until funds are withdrawn. |
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Term
| whats a 403(b) tax sheltered annuity? |
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Definition
| A tax advantaged savings plan for employees of nonprofit institutions. |
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Term
| by when should you retire? |
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Definition
| when you start losing money ('always retire before you start losing money') |
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Term
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Definition
| (Individual Retirement Account(s): An account for retirement that qualifies for special tax treatment under IRS regulations. |
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Term
| whats a Keogh (HR-10) plan? |
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Definition
| A tax deferred pension account for self employed individuals. |
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Term
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Definition
| a legal declaration of how you wish your property to be disposed of at your death. |
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Term
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Definition
| Property and wealth transferred at death. |
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Term
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Definition
without a valid will.
or (i.e. testator) refers to a male
rix (i.e. testatrix) refers to a female |
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Term
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Definition
| to die with a valid will. |
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Term
| what's an Executor or executrix? |
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Definition
| The person who manages the distribution of the death estate according to the wishes expressed in the will. |
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Term
| What's an administrator/administratrix? |
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Definition
| The courts appointed manager of the death estate or will. |
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Term
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Definition
| property given by a wish expressed in a will. |
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Term
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Definition
| an amendment to an existing will, modifying or explaining specific items. |
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Term
| whats a letter of last instruction? |
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Definition
| A document providing advice on the management of your death estate and the distribution of your assets. |
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Term
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Definition
| a court process in which assets are transferred according to a will or the laws of intestacy. |
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Term
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Definition
| a legal arrangement in which property is held by one party for the benefit of another. |
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Term
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Definition
| the one who is to benefit from the trust. |
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Term
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Definition
| the one who controls the property in the trust. |
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Term
| whats an irrevocable trust? |
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Definition
| a trust that can never be changed. |
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Term
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Definition
| a trust that can be changed or revoked by the one who established the trust (grantor). |
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Term
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Definition
| a tax on property either transferred or received at death. |
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Term
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Definition
| a tax imposed on the property of the deceased before transfer. |
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Term
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Definition
a tax imposed upon gifts transferred during life.
(You can give up to $12,000 w/out tax as of 2006) |
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Term
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Definition
| a tax paid by the beneficiary on property received as an inheritance. |
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Term
| How do you solve for the future value given present value, interest rate, and number of periods? |
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Definition
FV = PV x (1 + r)^n
FV = Future value
PV = Present amount
r = interest rate
n = number of periods |
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Term
| How you find future value given annuity amount, interest rate, and number of periods? |
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Definition
FV = AA x [(1 + r)n - 1] / r
FV = future value
AA = annuity amount
r = interest rate
n = number of periods |
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Term
| How do you find the inflation rate (IR) given the recent year's price (RYP) and previous year's price (PYP)? |
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Definition
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Term
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Definition
| a definite plan for the administration and disposition of one's property during one's lifetime and at one's death. |
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Term
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Definition
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Term
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Definition
| a will that leaves everything to the spouse; also called an i love you will |
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Term
| what's an exemption trust will? |
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Definition
| a will in which everything passes to the spouse except the exemption ($2,000,000 in 2006) |
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Term
| what's a stated dollar amount will? |
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Definition
| a will that allows you to pass on to your spouse any amount that satisfies your family objectives (you should really use percentages) |
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Term
| what's a holographic will? |
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Definition
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Term
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Definition
| a will that is usually prepared with an attorney's assistance |
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Term
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Definition
| a formal will on a preprinted form |
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Term
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Definition
| a document that dispenses emotional and spiritual wealth to heirs |
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Term
| what's a prenuptial agreement? |
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Definition
| a documentary agreement between spouses before marriage |
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Term
| what's a living will (also called an advance directive)? |
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Definition
| a document that enables an individual, while well, to express the intention that life be allowed to end if he or she becomes terminally ill |
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Term
| what's a power of attorney? |
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Definition
| a legal document authorizing someone to act on one's behalf |
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Term
| what's a letter of last instruction? |
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Definition
| this doc, though not legally enforceable, can provide your heirs with important information (e.g. you funeral arrangements). |
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Term
| what's a durable power of attorney for health care? |
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Definition
| If you are unable to make decisions regarding your health care this authorizes someone to do it for you. |
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Term
| what's a defined contribution plan? |
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Definition
| a plan--profit sharing, money purchase, Keogh, or 401(k)--that provides an individual account for each participant |
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Term
| what's a defined contribution plan? |
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Definition
| a plan--profit sharing, money purchase, Keogh, or 401(k)--that provides an individual account for each participant |
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Term
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Definition
| an employee's right to at least a portion of the benefits accrued under an employer pension plan, even if the employee leaves the company before retiring |
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Term
| what's a defined contribution plan? |
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Definition
| a plan--profit sharing, money purchase, Keogh, or 401(k)--that provides an individual account for each participant |
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Term
| what's a defined benefit plan |
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Definition
| a plan that specified the benefits the employee will receive at the normal retirement age |
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