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401(k) plan
A retirement plan made available by a company to its employees, featuring tax-deferred contributions and growth. The plan may also include matching contributions by the company.


The individual, institution, trustee, or estate which receives, or may become eligible to receive, benefits, under a will, retirement plan, or other contract.
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Catch-up contribution
Contributions that workers over 50 are permitted to make, which have a higher maximum contribution limit than normal.
A payment made to an annuity or retirement plan.
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A payment made from a retirement plan to the account owner.
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The money earned in your IRA as it grows from year to year, as distinct from any contributions that you've made to it.
Educational IRA
Also known as the Coverdell Education Savings Account, it is a nondeductible account that features tax-free withdrawals for a child's education expenses.
Employer and Employee Association Trust Account (Group IRA)
An IRA set up by employers, unions, and other employee associations for employees or members.
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Federal Deposit Insurance Corporation (FDIC)
A federal agency that insures deposits in member financial institutions up to $100,000 per depositor and $250,000 for IRAs.
Fixed interest rate
An interest rate that remains the same during the duration of the term (e.g. 12-month fixed IRA).
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Generation X
In general, the generation of people who were born in the 1960s and 1970s.
Generation Y
In general, the generation of people who were born in the 1980s and 1990s.
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HR 10 Plan (Keogh Plan)
A tax-deferred retirement savings plan for self-employed individuals.
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Individual retirement account (IRA)
An account for the purpose of saving up for retirement that provides tax-advantages to the account-holder. The two most common types are the Traditional IRA and the Roth IRA.
Individual retirement annuity
An IRA set up with a life insurance company through the purchase of a special annuity contract.
A general rise in prices measured against a standard level of purchasing power.
Inherited IRA
An IRA acquired by the non-spousal beneficiary of a deceased IRA owner.
Interest rate
The percent charged or paid for the use of money.
Internal Revenue Code
The main body of domestic statutory tax law of the United States organized topically, including laws covering the income tax, payroll taxes, gift taxes, estate taxes and statutory excise taxes.
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Keogh Plan (HR 10 Plan)
A tax-deferred retirement savings plan for self-employed individuals.
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Modified Adjusted Gross Income (MAGI)
The amount of income that determines how much of an individual's IRA contribution is deductible. It is found by taking the individual's adjusted gross income and adding back certain items such as foreign income, foreign-housing deductions, student-loan deductions, IRA-contribution deductions and deductions for higher-education costs.
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Payroll deduction IRA
An option for employers to offer their employees who want to save toward their retirement. There usually is no matching on the part of the employer.
Pension plan
A type of retirement plan, usually tax exempt, wherein an employer makes contributions toward a pool of funds set aside for an employee's future benefit. The pool of funds is then invested on the employee's behalf, allowing the employee to receive benefits upon retirement.
A collection of investments all owned by the same individual or organization.
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Relationship banking
A product offered by financial institutions in which you get special discounts and incentives if you have several accounts with the same bank. Generally, a checking account is the anchor account.
Roth IRA
A tax-deferred retirement account where the contributions are not tax deductible. There is also no tax on the withdrawals as long as the taxpayer is over 59 � and the account has been open for five years.
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Savings Incentive Match Plan for Employees (SIMPLE IRA)
An employer-sponsored plan where plan contributions are made to a participating employee's IRA.
Simplified Employee Pension (SEP) Plan
A retirement plan for self-employed or small business owners.
Social Security
A US federal benefits program that includes retirement benefits, disability income, veteran's pension plus other benefits. Employees and employers contribute to this fund through taxes equally levied.
Spousal IRA
A traditional or Roth IRA funded by a married taxpayer in the name of his or her spouse who has less than the maximum allowable annual IRA contribution in annual compensation.
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Traditional IRA
An Individual Retirement Account where the income generated is tax-deferred until withdrawn. Your original contribution may or may not be tax deductible, depending upon your specific circumstances.
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Variable rate
An interest rate that may fluctuate during the term of the deposit account. Sometimes the rate changes based on changes in an index rate, such as the prime rate or other prescribed criteria. Sometimes the bank changes the rate at its discretion or internal indices.
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