Asset allocation
How you split your portfolio across stocks, bonds, cash, and alternatives; the main driver of long-term return and risk.
Bond
A loan to a government or company that pays fixed interest and returns your principal at maturity; generally lower-volatility than stocks.
Catch-up contribution
An extra amount people 50+ can add to IRAs and 401(k)s beyond the standard annual limit.
Defined benefit plan
A traditional pension that promises a set monthly payment in retirement, with your former employer (usually) bearing the investment risk.
Expense ratio
The annual fee a fund charges, expressed as a percentage of assets; lower is better, and over decades the difference compounds meaningfully.
Fiduciary
A financial professional legally required to act in your best interest, not just recommend "suitable" products.
Index fund
A low-cost mutual fund or ETF that tracks a broad market benchmark rather than trying to beat it.
Individual Retirement Account (IRA)
A tax-advantaged retirement account you open yourself; traditional IRAs deduct now and tax withdrawals, Roth IRAs are the reverse.
Required Minimum Distribution (RMD)
The minimum amount the IRS forces you to withdraw each year from most pre-tax retirement accounts starting at age 73 (or 75 depending on birth year).
Roth conversion
Moving money from a traditional (pre-tax) retirement account into a Roth account and paying tax on it now so future growth and withdrawals are tax-free.
Roth IRA
An IRA funded with after-tax dollars; qualified withdrawals, including earnings, are tax-free.
Social Security
The federal retirement benefit you earned through payroll taxes; claiming age permanently sets your monthly check, so the timing is a real retirement decision.
Systematic withdrawal plan
A fixed schedule of taking money from your portfolio in retirement; helps you budget and can be tuned for tax efficiency.
Target-date fund
A single fund whose stock/bond mix automatically shifts more conservative as you approach a target retirement year.
Tax-loss harvesting
Selling an investment at a loss to offset capital gains (and up to $3,000 of ordinary income), then replacing it with a similar (not "substantially identical") investment to stay invested.
Traditional IRA
An IRA funded with pre-tax dollars (often deductible); withdrawals in retirement are taxed as ordinary income.
W-4R / withholding
The IRS form you use to tell the IRS how much tax to withhold from pension or RMD checks when you can't have taxes withheld automatically.
Wash sale
IRS rule: if you buy a "substantially identical" security within 30 days before or after selling one at a loss, the loss is disallowed for tax purposes — the rule that complicates harvesting.
401(k)
An employer-sponsored retirement plan that lets you contribute pre-tax (traditional) or post-tax (Roth) dollars, often with a company match.
403(b)
The retirement plan available to public-school employees, nonprofits, and some ministers; structurally similar to a 401(k).