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epf 7
| Term | Definition |
|---|---|
| 401K | retirement savings plan funded by deductions from your paycheck |
| 403B | a retirement savings plan for those employed by a tax-exempt institution (hospitals and nonprofits) |
| Pensions | benefit that requires an employer to make contributions to a pool of money funding eligible employees during retirement; employers offer “matching programs” for higher payouts in retirement through larger contributions; these are deducted from paychecks |
| Health Insurance | these are deducted directly if you elect this benefit from your employer/it is offered; this is usually a percentage of costs or set amount taken from each pay cycle |
| Medicare/Medicaid | up to a certain amount is subject to this tax and is taxed at a 1.45% rate (this is included in FICA) |
| Social Security | up to a certain amount is subject to this tax and is taxed at a 6.2% rate (this is included in FICA) |
| Traditional Individual Retirement Account (IRA) | a special account in which a person saves a portion of their pay for retirement before taxes like FICA, Federal, State are taken out, instead you pay the taxes when you start withdrawing the money in retirement. |
| Roth Individual Retirement Account | used by families to save additional money for college; these can count as income when taken out for college and could alter financial aid packages or eligibility; contributions are low for this type of savings |
| Premium | the money paid to an insurance company to purchase a policy; some companies offer savings for paying in fewer installments over the course of a year or purchasing multiple types of insurance |
| HMO vs. PPO | both plans have networks of contracted medical providers; HMO policies do not reimburse for providers who are not in their network; PPO policies offer a reduced reimbursement for out-of-network providers and may have other limitations on those services |
| Copay | a scheduled amount due for a covered medical service or product with medical insurer paying the difference |
| Co-insurance | a rate that a policyholder pays for certain medical services or products based on a negotiated rate between the insurer and medical provider; in some plans this is after the deductible is met |
| Deductible | the set amount that a policyholder must pay per loss on an insurance policy |
| Actual cash value | claim settling method in which the payment received is based on the replacement value minus depreciation |
| Replacement value | claim settling method in which the payment received is the full cost of repair or replacement |
| Life Insurance | premiums pay a death benefit to named beneficiary |
| Health Insurance | helps cover the financial burden of healthcare; do not usually cover vision and dental insurance |
| Short-term disability Insurance | regular cash income when an employee is unable to work due to accident or illness, some allow pregnancy; usually have to wait before you are paid |
| Death benefit | a payout to the beneficiary of a life insurance policy, annuity, or pension when the insured or annuitant dies. For life insurance policies, this is not subject to income tax; named beneficiaries ordinarily receive this as a lump-sum payment. |
| Beneficiary | person named to receive benefits from an insurance policy |
| Last will and testament | a legal document that outlines your preferences related to property distribution after death, such as who will inherit your home, personal belongings, or money. |
| Codicil to will | A NC will can be changed at any time before your death through either a codicil, which is an amendment or addition to an existing will, or by creating an entirely new will that properly revokes any previous wills. |
| Living will | legal document in which you state whether you want to be kept alive by artificial means if you become terminally ill and cannot make the decision |
| Living trust | property management arrangement in which someone takes over some of your assets and the trustee receives instructions for managing the assets while you are alive as well as after your death |
| Transfer on death deed | allow you to pass ownership of your accounts directly to a beneficiary of your choosing when death occurs. Without such designations, each account would have to go through the probate court before it can be distributed to your desired heirs. |
| Durable power of attorney | a legal document that allows someone to act on your behalf |
Created by:
deissyg
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