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Glossary

What is Stock?

Also known as "shares" or "equity," stock is a type of security issued by corporations to raise capital that entitles stock owners (shareholders) to partial ownership of the corporation. Most stocks are bought and sold on what is called an...

What is a Target-date Fund?

A target-date fund is a mutual fund comprised of a portfolio of mutual funds with a particular asset allocation based on a specific investing goal time frame that adjusts to become less risky over time. For example, a fund with a target date of 15...

What is a Tax Bracket?

A tax bracket is the rate at which an individual is taxed. Tax brackets are based on income levels so that individuals with lower income levels are taxed at a lower rate than individuals with higher income levels. Tax brackets serve as cutoff...

What is Tax-deferred?

Tax-deferred are investment earnings such as interest, dividends or capital gains that accumulate tax free until withdrawn. The most common types of tax-deferred investments include those in individual retirement accounts (IRAs), college savings...

What is Tax-deductible?

Tax-deductible is a description of a contribution or expense that can be subtracted from adjusted gross income to reduce the amount of income subject to tax. Tax authorities specify what can be deducted from gross income for the purpose of...

What is Taxable Income?

Taxable income is the amount of income subject to income taxes that is calculated by subtracting eligible deductions (such as IRA contributions, alimony payments, unreimbursed business expenses, some capital losses, etc.) from adjusted gross...

What is a Will?

A will is a legally enforceable declaration directing the distribution of an individual's assets upon her/his death. A "living will" typcially specifies medical directives and identifies power of attorney in the event of terminal illness or...

What is Withholding (taxes)?

Withholding (taxes) is an amount of an employee's income that an employer sends directly to the federal, state, or local tax authority as partial payment of that individual's tax liability for the year. When a person starts a new job, he/she is...

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