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Glossary

What is a 401(k)?

A 401(k) is a employer-sponsored, tax-advantaged retirement plan funded with payroll deductions and in some cases contributions by the employer. The employee is responsible for choosing how to invest money in the plan and therefore assume most of...

What is a 403(b)?

The 403(b) is similar to the 401(k), but it is typically offered to employees of educational institutions and non-profit organziations. 403(b)s most often take the form of annuity contracts or mutual fund custodial accounts and are also known as...

What is a 529 Savings Plan?

A 529 Savings Plan is a college savings plan where money can be invested to grow on a tax-deferred basis and withdrawn free from federal and potentially state taxes if used for "qualified" higher education expenses, including tuition, room &...

What is Adjusted Gross Income (AGI)?

Adjusted gross income (AGI) is a calculation to determine your taxable income after allowable deductions, such as unreimbursed business expenses, medical expenses, alimony and deductible retirement plan contributions. It not only determines your...

What is Annual Percentage Rate (APR)?

Annual percetage rate (APR) is what you pay for borrowing, expressed as a single percentage that represents the actual yearly cost over the term of a loan. This includes any fees or additional costs associated with the transaction.   Ask an...

What is Annual Percentage Yield (APY)?

Annual percentage yield (APY) is a calculation that tells you how much a deposit earns you over the course of a year, taking compound interest into account.    See Also: 3 Steps to Saving Success A Penny Saved, Part III Set It, Forget It, and Save

What is Asset Allocation?

Asset allocation is an investment strategy to balance risk and return by dividing monies between three main asset classes -- equities (stocks), fixed-income (bonds), and cash and equivalents -- that is based on an individual's goals, risk...

What is an Asset?

An asset is an entity with economic value that you own with the expectation that it will provide future benefit.    See Also: Ask An Advisor: Help! I'm Running Out of Money Top 8 Mistakes Investors Make Ask An Advisor: How to Recover Financially...

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