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Investing to Retire
Term | Definition |
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401(k) Plan | a type of employer-sponsored retirement plan in which money is contributed on a pre-tax basis and all earnings are tax deferred |
Annuity | an investment contract made with an issuer; types include immediate, deferred, fixed, and variable |
Defined-Benefit Plan | a type of retirement plan, usually a pension, in which the payment amount is guaranteed |
Defined-Contribution Plan | a type of retirement plan in which the amount invested in the plan is controlled by the employee, with no guarantee of benefits |
Employer-Sponsored Retirement Plan | a savings plan for retirement that is offered through a company’s benefits package; contributions are usually matched by the company |
IRA | a type of retirement savings plan that is not usually done through an employer |
Koegh Plan | a retirement savings plan for self-employed professionals or owners of small businesses |
Pension | a fixed sum paid regularly by an employer to an employee after retirement |
Retirement | permanent withdrawal from the workforce |
Roth IRA | a type of IRA that is not tax deductible but may not be subject to income tax upon withdrawal |
Social Security | a United States government program established in 1935 that includes a retirement benefit for citizens; it is funded by payroll taxes |