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 provided all the funds and the employee need not contribute |
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Term
| Contributory Retirement Plan |
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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 empoloyees 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 conributions made bu your employer in your name. In the case of a pension plan, employees become vested when they've worked for a sepcified 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 whcih the employer makes pension contributions directly to a trustee who holds and invests the employee's retirement funds |
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Term
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Definition
| A pension fund 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 whcih you and your employer or your employer alone contributes directly to a retirement account set aside specifically for you. In effect, a defined-contribution plan can be thought 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 whcih 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-deffered 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-deffered 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 pension plan in whcih the employer matches a perecentage of the employees' contributions to their retirement accounts |
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Term
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Definition
| A tax-sheltered retirement plan for the 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 in to 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 contribution may or may not be tax-deductible, depending on the individual's income level and whether he or she, is 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 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 the 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 tehre is no tax on withdrawals to pay for education |
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Term
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Definition
| Tax-advantaged 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 annuity 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 i fyou die before the end of the time period (generally either 10 or 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 Annuity |
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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 payout arrangement in which you receive all your benefits in one single payment |
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