Glossary Terms

A defined contribution planA retirement plan under which the annual contributions made by the employer or employee are generally stated as a fixed percentage of the employee's compensation or company profits. The amount of retirement benefits is not guaranteed; rather, it depends upon the investment performance of the employee's account. that may be established by a company for retirement. Employees may allocate a portion of their salaries into this plan, and contributions are excluded from their income for tax purposes (with limitations). Contributions and earnings will compound tax deferredInterest, dividends, or capital gains that grow untaxed in certain accounts or plans until they are withdrawn.. Withdrawals from a 401(k) planA defined contribution plan that may be established by a company for retirement. Employees may allocate a portion of their salaries into this plan, and contributions are excluded from their income for tax purposes (with limitations). Contributions and earnings will compound tax deferred. Withdrawals from a 401(k) plan are taxed as ordinary income, and may be subject to an additional 10 percent federal tax penalty if withdrawn prior to age 59 ½. are taxed as ordinary income, and may be subject to an additional 10 percent federal tax penalty if withdrawn prior to age 59 ½.

A defined contribution planA retirement plan under which the annual contributions made by the employer or employee are generally stated as a fixed percentage of the employee's compensation or company profits. The amount of retirement benefits is not guaranteed; rather, it depends upon the investment performance of the employee's account. that may be established by a nonprofit organization or school for retirement. Employees may allocate a portion of their salaries into this plan, and contributions are excluded from their income for tax purposes (with limitations). Contributions and earnings will compound tax deferredInterest, dividends, or capital gains that grow untaxed in certain accounts or plans until they are withdrawn.. Withdrawals from a 403(b) planA defined contribution plan that may be established by a nonprofit organization or school for retirement. Employees may allocate a portion of their salaries into this plan, and contributions are excluded from their income for tax purposes (with limitations). Contributions and earnings will compound tax deferred. Withdrawals from a 403(b) plan are taxed as ordinary income, and may be subject to an additional 10 percent federal tax penalty if withdrawn prior to age 59 ½. are taxed as ordinary income, and may be subject to an additional 10 percent federal tax penalty if withdrawn prior to age 59 ½.

An interim calculation in the computation of income tax liabilityAny claim against the assets of a person or corporation: accounts payable, wages, and salaries payable, dividends declared payable, accrued taxes payable, and fixed or long-term obligations such as mortgages, debentures, and bank loans.. It is computed by subtracting certain allowable adjustments from gross income.

A person appointed by the court to settle an estate when there is no will.

The return from an investment after the effects of taxes have been taken into account.

A mutual fundA collection of stocks, bonds, or other securities purchased and managed by an investment company with funds from a group of investors. whose primary investment objective is substantial capital gainThe difference between the sales price and the purchase price of a capital asset. When that difference is positive, the difference is referred to as a capital gain. When the difference is negative, it is a capital loss.s.

A method of calculating income tax that disallows certain deductionAn amount that can be subtracted from gross income, from a gross estate, or from a gift, thereby lowering the amount on which tax is assessed.s, credits, and exclusions. This was intended to ensure that individuals, trustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation s, and estates that benefit from tax preferences do not escape all federal income tax liabilityAny claim against the assets of a person or corporation: accounts payable, wages, and salaries payable, dividends declared payable, accrued taxes payable, and fixed or long-term obligations such as mortgages, debentures, and bank loans.. People must calculate their taxes both ways and pay the greater of the two.

An insurance-based contract that provides future payments at regular intervals in exchange for current premiums. AnnuityAn insurance-based contract that provides future payments at regular intervals in exchange for current premiums. Annuity contracts are usually purchased from banks, credit unions, brokerage firms, or insurance companies. contracts are usually purchased from banks, credit unions, brokerage firms, or insurance companies.

Anything owned that has monetary value.

The process of repositioning assetAnything owned that has monetary value.s within a portfolioAll the investments held by an individual or a mutual fund. to maximize return for a given level of riskThe chance that an investor will lose all or part of an investment.. This process is usually done using the historical performance of the asset classA category of investments with similar characteristics.es within sophisticated mathematical models.

A category of investments with similar characteristics.

The examination of the accounting and financial documents of a firm by an objective professional. The auditThe examination of the accounting and financial documents of a firm by an objective professional. The audit is done to determine the records' accuracy, consistency, and conformity to legal and accounting principles. is done to determine the records' accuracy, consistency, and conformity to legal and accounting principles.

A mutual fundA collection of stocks, bonds, or other securities purchased and managed by an investment company with funds from a group of investors. whose objective is a balance of stocks and bondA bond is evidence of a debt in which the issuer promises to pay the bondholders a specified amount of interest and to repay the principal at maturity. Bonds are usually issued in multiples of $1,000.s. Such funds tend to be less volatile than stock-only funds.

When the stock market appears to be declining overall, it is said to be a bear marketWhen the stock market appears to be declining overall, it is said to be a bear market..

A person named in a life insuranceIn exchange for periodic payments (premiums), life insurance provides financial compensation to a designated person or persons (beneficiaries) if the insured person dies. Typical uses of life insurance are to help cover final expenses and medical bills, pay off a mortgage and other debts, provide income for survivors and fund children's educations. policy, annuityAn insurance-based contract that provides future payments at regular intervals in exchange for current premiums. Annuity contracts are usually purchased from banks, credit unions, brokerage firms, or insurance companies., will, trustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation , or other agreement to receive a financial benefit upon the death of the owner. A beneficiaryA person named in a life insurance policy, annuity, will, trust, or other agreement to receive a financial benefit upon the death of the owner. A beneficiary can be an individual, company, organization, and so on. can be an individual, company, organization, and so on.

The common stockA unit of ownership in a corporation. Common stockholders participate in the corporation's profits or losses by receiving dividends and by capital gains or losses in the stock's share price. of a company with a long history of profitability and consistent dividendA pro rata portion of earnings distributed in cash by a corporation to its stockholders. In preferred stock, dividends are usually fixed; with common shares, dividends may vary with the fortunes of the company. payments.

A bondA bond is evidence of a debt in which the issuer promises to pay the bondholders a specified amount of interest and to repay the principal at maturity. Bonds are usually issued in multiples of $1,000. is evidence of a debt in which the issuer promises to pay the bondA bond is evidence of a debt in which the issuer promises to pay the bondholders a specified amount of interest and to repay the principal at maturity. Bonds are usually issued in multiples of $1,000.holders a specified amount of interest and to repay the principalIn a security, the principal is the amount of money that is invested, excluding earnings. In a debt instrument such as a bond, it is the face amount. at maturity. BondA bond is evidence of a debt in which the issuer promises to pay the bondholders a specified amount of interest and to repay the principal at maturity. Bonds are usually issued in multiples of $1,000.s are usually issued in multiples of $1,000.

The net value of a company's assetAnything owned that has monetary value.s, less its liabilities and the liquidation price of its preferred issues. The net asset valueThe price at which a mutual fund sells or redeems its shares. The net asset value is calculated by dividing the net market value of the fund's assets by the number of outstanding shares. divided by the number of shares of common stockA unit of ownership in a corporation. Common stockholders participate in the corporation's profits or losses by receiving dividends and by capital gains or losses in the stock's share price. outstanding equals the book valueThe net value of a company's assets, less its liabilities and the liquidation price of its preferred issues. The net asset value divided by the number of shares of common stock outstanding equals the book value per share, which may be higher or lower than the stock's market value. per share, which may be higher or lower than the stock's market value.

When the stock market appears to be advancing overall, it is said to be a bull marketWhen the stock market appears to be advancing overall, it is said to be a bull market. .

A buy-sell agreementA buy-sell agreement is an arrangement between two or more parties that obligates one party to buy the business and another party to sell the business upon the death, disability, or retirement of one of the owners. is an arrangement between two or more parties that obligates one party to buy the business and another party to sell the business upon the death, disability, or retirement of one of the owners.

The difference between the sales price and the purchase price of a capital assetAnything owned that has monetary value.. When that difference is positive, the difference is referred to as a capital gainThe difference between the sales price and the purchase price of a capital asset. When that difference is positive, the difference is referred to as a capital gain. When the difference is negative, it is a capital loss.. When the difference is negative, it is a capital lossThe difference between the sales price and the purchase price of a capital asset. When that difference is positive, the difference is referred to as a capital gain. When the difference is negative, it is a capital loss..

Short-term investments, such as U.S. Treasury securities, certificates of deposit, and money market fundA mutual fund that specializes in investing in short-term securities and that tries to maintain a constant net asset value of $1. shares, that can be readily converted into cash.

The amount that an insurance policyholder is entitled to receive when he or she discontinues coverage. Policyholders are usually able to borrow against the surrender value of a policy from the insurance company. Loans that are not repaid will reduce the policy's death benefit.

A credential granted by the Certified Financial Planner Board of Standards, Inc. (Denver, CO) to individuals who complete a comprehensive curriculum in financial planning and ethics. CFP®, CERTIFIED FINANCIAL PLANNER® and federally registered CFP (with flame logo)® are certification marks owned by the Certified Financial Planner Board of Standards. These marks are awarded to individuals who successfully complete the CFP Board's initial and ongoing certification.

A professional license granted by a state board of accountancy to an individual who has passed the Uniform CPAA professional license granted by a state board of accountancy to an individual who has passed the Uniform CPA Examination (administered by the American Institute of Certified Public Accountants) and has fulfilled that state's educational and professional experience requirements for certification. Examination (administered by the American Institute of Certified Public AccountantA professional license granted by a state board of accountancy to an individual who has passed the Uniform CPA Examination (administered by the American Institute of Certified Public Accountants) and has fulfilled that state's educational and professional experience requirements for certification.s) and has fulfilled that state's educational and professional experience requirements for certification.

A trustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation established for the benefit of a charitable organization under which the charitable organization receives income from an assetAnything owned that has monetary value. for a set number of years or for the trustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation or's lifetime. Upon the termination of the trustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation , the assetAnything owned that has monetary value. reverts to the trustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation or or to his or her designated heirs. This type of trustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation can reduce estate taxUpon the death of a decedent, federal and state governments impose taxes on the value of the estate left to others (with limitations).es and allows the trustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation or's heirs to retain control of the assetAnything owned that has monetary value.s.

A trustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation established for the benefit of a charitable organization under which the trustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation or receives income from an assetAnything owned that has monetary value. for a set number of years or for the trustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation or's lifetime. Upon the termination of the trustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation , the assetAnything owned that has monetary value. reverts to the charitable organization. The trustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation or receives a charitable contribution deductionAn amount that can be subtracted from gross income, from a gross estate, or from a gift, thereby lowering the amount on which tax is assessed. in the year in which the trustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation is established, and the assetAnything owned that has monetary value.s placed in the trustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation are exempt from capital gainThe difference between the sales price and the purchase price of a capital asset. When that difference is positive, the difference is referred to as a capital gain. When the difference is negative, it is a capital loss.s tax.

A professional financial planning designation granted by The American College (Bryn Mawr, PA) to individuals who complete a comprehensive curriculum in financial planning. Prerequisites include passing a series of written examinations, meeting specified experience requirements and maintaining ethical standards. The curriculum encompasses wealth accumulation, riskThe chance that an investor will lose all or part of an investment. management, income taxation, planning for retirement needs, investments, estate and succession planning.

A professional designation granted by The American College to individuals who complete a comprehensive curriculum focused primarily on riskThe chance that an investor will lose all or part of an investment. management. Prerequisites include passing a series of written examinations, meeting specified experience requirements, and maintaining ethical standards. The curriculum encompasses insurance and financial planning, income taxation, individual life insuranceIn exchange for periodic payments (premiums), life insurance provides financial compensation to a designated person or persons (beneficiaries) if the insured person dies. Typical uses of life insurance are to help cover final expenses and medical bills, pay off a mortgage and other debts, provide income for survivors and fund children's educations., life insuranceIn exchange for periodic payments (premiums), life insurance provides financial compensation to a designated person or persons (beneficiaries) if the insured person dies. Typical uses of life insurance are to help cover final expenses and medical bills, pay off a mortgage and other debts, provide income for survivors and fund children's educations. law, estate and succession planning, and planning for business owners and professionals.

The Consolidated Omnibus Budget Reconciliation Act is a federal law requiring employers with more than 20 employees to offer terminated or retired employees the opportunity to continue their health insurance coverage for 18 months at the employee's expense. Coverage may be extended to the employee's dependents for 36 months in the case of divorce or death of the employee.

The amount an insured person must pay for a covered medical and/or dental expense if his or her insurance doesn't provide 100 percent coverage.

The generic term for goods such as grains, foodstuffs, livestock, oils, and metals which are traded on national exchanges. These exchanges deal in both "spot" trading (for current delivery) and "futures" trading (for delivery in future months).

A unit of ownership in a corporation. Common stockA unit of ownership in a corporation. Common stockholders participate in the corporation's profits or losses by receiving dividends and by capital gains or losses in the stock's share price.holders participate in the corporation's profits or losses by receiving dividendA pro rata portion of earnings distributed in cash by a corporation to its stockholders. In preferred stock, dividends are usually fixed; with common shares, dividends may vary with the fortunes of the company.s and by capital gainThe difference between the sales price and the purchase price of a capital asset. When that difference is positive, the difference is referred to as a capital gain. When the difference is negative, it is a capital loss.s or losses in the stock's share price.

State laws vary, but generally all property acquired during a marriage - excluding property one spouse receives from a will, inheritance, or gift - is considered community propertyState laws vary, but generally all property acquired during a marriage - excluding property one spouse receives from a will, inheritance, or gift - is considered community property, and each partner is entitled to one half. This includes debt accumulated. There are currently nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. , and each partner is entitled to one half. This includes debt accumulated. There are currently nine community propertyState laws vary, but generally all property acquired during a marriage - excluding property one spouse receives from a will, inheritance, or gift - is considered community property, and each partner is entitled to one half. This includes debt accumulated. There are currently nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.

Interest that is computed on the principalIn a security, the principal is the amount of money that is invested, excluding earnings. In a debt instrument such as a bond, it is the face amount. and on the accrued interest. Compound interestInterest that is computed on the principal and on the accrued interest. Compound interest may be computed continuously, daily, monthly, quarterly, semiannually, or annually. may be computed continuously, daily, monthly, quarterly, semiannually, or annually.

The U.S. Department of Labor's main indicator of inflationAn increase in the price of products and services over time. The government's main measure of inflation is the Consumer Price Index.. The Consumer Price IndexThe U.S. Department of Labor's main indicator of inflation. The Consumer Price Index is calculated each month from the cost of some 400 retail items in urban areas throughout the United States. is calculated each month from the cost of some 400 retail items in urban areas throughout the United States.

.An account typically established in a bank, brokerage firm or mutual fundA collection of stocks, bonds, or other securities purchased and managed by an investment company with funds from a group of investors. company that is administered by one person or entity (the custodian) for the benefit of another person. Custodial account.An account typically established in a bank, brokerage firm or mutual fund company that is administered by one person or entity (the custodian) for the benefit of another person. Custodial accounts are often established by parents for minor children who, because of their age, cannot legally enter into contracts and therefore cannot make securities transactions for themselves. When the child reaches the age of majority established by his or her state of residence (typically 18 or 21 years of age), he or she assumes control of the assets. Two types of custodial accounts are defined by the Uniform Gifts to Minors Act (UGMA) and the Uniform Transfers to Minors Act (UTMA).s are often established by parents for minor children who, because of their age, cannot legally enter into contracts and therefore cannot make securities transactions for themselves. When the child reaches the age of majority established by his or her state of residence (typically 18 or 21 years of age), he or she assumes control of the assetAnything owned that has monetary value.s. Two types of custodial account.An account typically established in a bank, brokerage firm or mutual fund company that is administered by one person or entity (the custodian) for the benefit of another person. Custodial accounts are often established by parents for minor children who, because of their age, cannot legally enter into contracts and therefore cannot make securities transactions for themselves. When the child reaches the age of majority established by his or her state of residence (typically 18 or 21 years of age), he or she assumes control of the assets. Two types of custodial accounts are defined by the Uniform Gifts to Minors Act (UGMA) and the Uniform Transfers to Minors Act (UTMA).s are defined by the Uniform Gifts to Minors Act (UGMA) and the Uniform Transfers to Minors Act (UTMA).

A type of loan designed to consolidate multiple debts, typically at a lower interest rate, enabling the borrower to reduce monthly payments or accelerate payoff of debt.

An amount that can be subtracted from gross income, from a gross estate, or from a gift, thereby lowering the amount on which tax is assessed.

DROPDROP is a program under which you may retire and have your monthly retirement benefits remain in the Florida Retirement System (FRS) Trust Fund instead of being paid directly to you or deposited in your bank. is a program under which you may retire and have your monthly retirement benefits remain in the Florida Retirement System (FRS) TrustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation Fund instead of being paid directly to you or deposited in your bank.

A qualified retirement planA pension, profit-sharing, or qualified savings plan that is established by an employer for the benefit of the employees. These plans must be established in conformity with IRS rules. Contributions accumulate tax deferred until withdrawn and are deductible to the employer as a current business expense. under which a retiring employee will receive a guaranteed retirement fund, usually payable in installments. Annual contributions may be made to the plan by the employer at the level needed to fund the benefit. The annual contributions are limited to a specified amount, indexA calculation that uses a selection of stocks or bonds to gauge a certain market. The Dow Jones Industrial Average, for example, is an index of 30 large industrial companies on the New York Stock Exchange.ed for inflationAn increase in the price of products and services over time. The government's main measure of inflation is the Consumer Price Index..

A retirement plan under which the annual contributions made by the employer or employee are generally stated as a fixed percentage of the employee's compensation or company profits. The amount of retirement benefits is not guaranteed; rather, it depends upon the investment performance of the employee's account.

Investing in different companies, industries, or asset classA category of investments with similar characteristics.es. DiversificationInvesting in different companies, industries, or asset classes. Diversification may also mean the participation of a large corporation in a wide range of business activities. may also mean the participation of a large corporation in a wide range of business activities.

A pro rata portion of earnings distributed in cash by a corporation to its stockholders. In preferred stockA class of stock with claim to a company's earnings, before payment can be made on the common stock, and that is usually entitled to priority over common stock if the company liquidates. Generally, preferred stocks pay dividends at a fixed rate., dividendA pro rata portion of earnings distributed in cash by a corporation to its stockholders. In preferred stock, dividends are usually fixed; with common shares, dividends may vary with the fortunes of the company.s are usually fixed; with common shares, dividendA pro rata portion of earnings distributed in cash by a corporation to its stockholders. In preferred stock, dividends are usually fixed; with common shares, dividends may vary with the fortunes of the company.s may vary with the fortunes of the company.

A system of investing in which the investor buys a fixed dollar amount of securities at regular intervals. The investor thus buys more shares when the price is low and fewer shares when it rises, and the average cost per share is lower than the average price per share. This strategy does not protect against loss in declining markets and involves continuous investments, regardless of fluctuating price levels.

Also known as a "Coverdell ESAAlso known as a "Coverdell ESA", an ESA enables account-holders to contribute up to $2,000 per year until a child's 18th birthday and enjoy tax-deferred earnings as well as tax-free distributions for qualified elementary, secondary or post-secondary (college) education expenses.", an ESAAlso known as a "Coverdell ESA", an ESA enables account-holders to contribute up to $2,000 per year until a child's 18th birthday and enjoy tax-deferred earnings as well as tax-free distributions for qualified elementary, secondary or post-secondary (college) education expenses. enables account-holders to contribute up to $2,000 per year until a child's 18th birthday and enjoy tax-deferred earnings as well as tax-free distributions for qualified elementary, secondary or post-secondary (college) education expenses.

A statistical result from the analysis of the riskThe chance that an investor will lose all or part of an investment. and return for a given set of assetAnything owned that has monetary value.s that indicates the balance of assetAnything owned that has monetary value.s that may, under certain assumptions, achieve the best return for a given level of riskThe chance that an investor will lose all or part of an investment..

A defined contribution retirement plan in which company contributions must be invested primarily in qualifying employer securities.

A tax-favored retirement plan that is sponsored by an employer. Among the more common employer-sponsored retirement planA tax-favored retirement plan that is sponsored by an employer. Among the more common employer-sponsored retirement plans are 401(k) plans, 403(b) plans, simplified employee pension plans, and profit-sharing plans.s are 401(k) planA defined contribution plan that may be established by a company for retirement. Employees may allocate a portion of their salaries into this plan, and contributions are excluded from their income for tax purposes (with limitations). Contributions and earnings will compound tax deferred. Withdrawals from a 401(k) plan are taxed as ordinary income, and may be subject to an additional 10 percent federal tax penalty if withdrawn prior to age 59 ½.s, 403(b) planA defined contribution plan that may be established by a nonprofit organization or school for retirement. Employees may allocate a portion of their salaries into this plan, and contributions are excluded from their income for tax purposes (with limitations). Contributions and earnings will compound tax deferred. Withdrawals from a 403(b) plan are taxed as ordinary income, and may be subject to an additional 10 percent federal tax penalty if withdrawn prior to age 59 ½.s, simplified employee pension planA type of plan under which the employer contributes to an employee's IRA. Contributions may be made up to a certain limit and are immediately vested.s, and profit-sharing planAn agreement under which employees share in the profits of their employer. The company makes annual contributions to the employees' accounts. These funds usually accumulate tax deferred until the employee retires or leaves the company.s.

The value of a person's ownership in real property or securities; the market value of a property or business, less all claims and liens upon it.

An annuityAn insurance-based contract that provides future payments at regular intervals in exchange for current premiums. Annuity contracts are usually purchased from banks, credit unions, brokerage firms, or insurance companies. in which returns on invested assetAnything owned that has monetary value.s are linked to one or more equityThe value of a person's ownership in real property or securities; the market value of a property or business, less all claims and liens upon it. indexA calculation that uses a selection of stocks or bonds to gauge a certain market. The Dow Jones Industrial Average, for example, is an index of 30 large industrial companies on the New York Stock Exchange.es, such as the S&P 500An index of 500 widely held common stocks on the New York Stock Exchange (NYSE), compiled by Standard & Poor's Corporation, a provider of independent investment research and data. The S&P 500 is used as a measure to indicate the overall health of the US stock market. or the NASDAQNational Association of Securities Dealers Automatic Quotation system, an electronic quotation system that provides securities brokers with price quotations for stocks traded over the counter. 100. Typically, holders of this type of annuityAn insurance-based contract that provides future payments at regular intervals in exchange for current premiums. Annuity contracts are usually purchased from banks, credit unions, brokerage firms, or insurance companies. have the opportunity to limit the riskThe chance that an investor will lose all or part of an investment. of loss by also agreeing to limit gains. This is done by selecting "participation" and "cap" rates that offer the combination of riskThe chance that an investor will lose all or part of an investment. protection and potential reward that fits the annuityAn insurance-based contract that provides future payments at regular intervals in exchange for current premiums. Annuity contracts are usually purchased from banks, credit unions, brokerage firms, or insurance companies. holder's needs.

The Employee Retirement Income SecurityEvidence of an investment, either in direct ownership (as with stocks), creditorship (as with bonds), or indirect ownership (as with options). Act is a federal law covering all aspects of employee retirement plans. If employers provide plans, they must be adequately funded and provide for vesting, survivor's rights, and disclosures.

Activities coordinated to provide for the orderly and cost-effective distribution of an individual's assetAnything owned that has monetary value.s at the time of his or her death. Estate conservationActivities coordinated to provide for the orderly and cost-effective distribution of an individual's assets at the time of his or her death. Estate conservation often includes wills and trusts. often includes wills and trustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation s.

Upon the death of a decedent, federal and state governments impose taxes on the value of the estate left to others (with limitations).

The employer pays for a benefit that is owned by the executive. The bonus could take the form of cash, automobiles, life insuranceIn exchange for periodic payments (premiums), life insurance provides financial compensation to a designated person or persons (beneficiaries) if the insured person dies. Typical uses of life insurance are to help cover final expenses and medical bills, pay off a mortgage and other debts, provide income for survivors and fund children's educations., or other items of value to the executive.

A person named by the probateThe court-supervised process in which a decedent's estate is settled and distributed. courts or the will to carry out the directions and requests of the decedent.

Federal Deposit Insurance Corporation, an independent agency of the U.S. federal government that preserves and promotes public confidence in the U.S. financial system by insuring deposits in banks and thrift institutions for at least $100,000; by identifying, monitoring and addressing riskThe chance that an investor will lose all or part of an investment.s to the deposit insurance funds; and by limiting the effect on the economy and the financial system when a bank or thrift institution fails. Since the start of FDICFederal Deposit Insurance Corporation, an independent agency of the U.S. federal government that preserves and promotes public confidence in the U.S. financial system by insuring deposits in banks and thrift institutions for at least $100,000; by identifying, monitoring and addressing risks to the deposit insurance funds; and by limiting the effect on the economy and the financial system when a bank or thrift institution fails. Since the start of FDIC insurance on January 1, 1934 in response to the thousands of bank failures in the 1920s and early 1930s, no depositor has lost a single cent of insured funds as a result of a bank failure. insurance on January 1, 1934 in response to the thousands of bank failures in the 1920s and early 1930s, no depositor has lost a single cent of insured funds as a result of a bank failure.

An annuityAn insurance-based contract that provides future payments at regular intervals in exchange for current premiums. Annuity contracts are usually purchased from banks, credit unions, brokerage firms, or insurance companies. that guarantees a specific rate of return and a fixed payment, either for the annuitant's lifetime (the surviving spouse's, in the case of a married couple's joint annuityAn insurance-based contract that provides future payments at regular intervals in exchange for current premiums. Annuity contracts are usually purchased from banks, credit unions, brokerage firms, or insurance companies.) or for a specified period. (Guarantee depends on the claims-paying ability of the issuing insurance company and does not apply to the investment return or principalIn a security, the principal is the amount of money that is invested, excluding earnings. In a debt instrument such as a bond, it is the face amount. value of the sepA type of plan under which the employer contributes to an employee's IRA. Contributions may be made up to a certain limit and are immediately vested.arate account.)

Income from investments such as CDs, Social SecurityEvidence of an investment, either in direct ownership (as with stocks), creditorship (as with bonds), or indirect ownership (as with options). benefits, pension benefits, some annuities, or most bondA bond is evidence of a debt in which the issuer promises to pay the bondholders a specified amount of interest and to repay the principal at maturity. Bonds are usually issued in multiples of $1,000.s that is the same every month.

An approach to the stock market in which specific factors - such as the price-to-earnings ratio, yieldIn general, the yield is the amount of current income provided by an investment. For stocks, the yield is calculated by dividing the total of the annual dividends by the current price. For bonds, the yield is calculated by dividing the annual interest by the current price. The yield is distinguished from the return, which includes price appreciation or depreciation., or return on equityThe value of a person's ownership in real property or securities; the market value of a property or business, less all claims and liens upon it. - are used to determine what stock may be favorable for investment.

A federal tax levied on the transfer of property as a gift. This tax is paid by the donor. The first $12,000 a year from a donor to each recipient is exempt from tax. Most states also impose a gift tax. The gift tax exemption is indexA calculation that uses a selection of stocks or bonds to gauge a certain market. The Dow Jones Industrial Average, for example, is an index of 30 large industrial companies on the New York Stock Exchange.ed annually for inflationAn increase in the price of products and services over time. The government's main measure of inflation is the Consumer Price Index..

A will entirely in the handwriting of the testatorOne who has made a will or who dies having left a will.. Without witnesses, holographic willA will entirely in the handwriting of the testator. Without witnesses, holographic wills are valid and enforceable only in some states.s are valid and enforceable only in some states.

A calculation that uses a selection of stocks or bondA bond is evidence of a debt in which the issuer promises to pay the bondholders a specified amount of interest and to repay the principal at maturity. Bonds are usually issued in multiples of $1,000.s to gauge a certain market. The Dow Jones Industrial Average, for example, is an indexA calculation that uses a selection of stocks or bonds to gauge a certain market. The Dow Jones Industrial Average, for example, is an index of 30 large industrial companies on the New York Stock Exchange. of 30 large industrial companies on the New York Stock Exchange.

Contributions to a traditional IRAContributions to a traditional IRA are deductible from earned income in the calculation of federal and state income taxes if the taxpayer meets certain requirements. The earnings accumulate tax deferred until withdrawn, and then they are taxed as ordinary income. Individuals not eligible to make deductible contributions may make nondeductible contributions, the earnings on which would be tax deferred. are deductible from earned income in the calculation of federal and state income taxes if the taxpayer meets certain requirements. The earnings accumulate tax deferredInterest, dividends, or capital gains that grow untaxed in certain accounts or plans until they are withdrawn. until withdrawn, and then they are taxed as ordinary income. Individuals not eligible to make deductible contributions may make nondeductible contributions, the earnings on which would be tax deferredInterest, dividends, or capital gains that grow untaxed in certain accounts or plans until they are withdrawn..

An increase in the price of products and services over time. The government's main measure of inflationAn increase in the price of products and services over time. The government's main measure of inflation is the Consumer Price Index. is the Consumer Price IndexThe U.S. Department of Labor's main indicator of inflation. The Consumer Price Index is calculated each month from the cost of some 400 retail items in urban areas throughout the United States..

The condition of an estate left by a decedent without a valid will. State law then determines who inherits the property or serves as guardian for any minor children.

A broad class of assetAnything owned that has monetary value.s with similar characteristics. The five investment categories include cash equivalentsShort-term investments, such as U.S. Treasury securities, certificates of deposit, and money market fund shares, that can be readily converted into cash., fixed principalIn a security, the principal is the amount of money that is invested, excluding earnings. In a debt instrument such as a bond, it is the face amount., equityThe value of a person's ownership in real property or securities; the market value of a property or business, less all claims and liens upon it. , debt, and tangibles.

The potential for fluctuation in the value of an investment, which could result in loss of principalIn a security, the principal is the amount of money that is invested, excluding earnings. In a debt instrument such as a bond, it is the face amount.. Possible causes of investment risk The potential for fluctuation in the value of an investment, which could result in loss of principal. Possible causes of investment risk include general market fluctuations, industry-specific market fluctuations, company-specific factors, interest rate trends and currency fluctuations. Generally speaking, higher risk is associated with the potential for higher rates of return and lower risk with the likelihood of lower rates of return.include general market fluctuations, industry-specific market fluctuations, company-specific factors, interest rate trends and currency fluctuations. Generally speaking, higher riskThe chance that an investor will lose all or part of an investment. is associated with the potential for higher rates of return and lower riskThe chance that an investor will lose all or part of an investment. with the likelihood of lower rates of return.

A trustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation that may not be modified or terminated by the trustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation or after its creation.

Most pension plans must offer this form of pension plan payout that pays over the life of the retiree and his or her spouse after the retiree dies. The retiree and his or her spouse must specifically choose not to accept this payment form.

Co-ownership of property by two or more people in which the survivor(s) automatically assumes ownership of a decedent's interest.

Property owned by two or more persons under joint tenancyCo-ownership of property by two or more people in which the survivor(s) automatically assumes ownership of a decedent's interest., tenancy in commonA form of co-ownership. Upon the death of a co-owner, his or her interest passes to his or her chosen beneficiaries and not to the surviving owner or owners., or, in some states, community propertyState laws vary, but generally all property acquired during a marriage - excluding property one spouse receives from a will, inheritance, or gift - is considered community property, and each partner is entitled to one half. This includes debt accumulated. There are currently nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. .

This retirement plan, named for Eugene Keogh, is designed for self-employed individuals. Up to $46,000 of self-employed income may be deducted from compensation and set aside into the plan.

A legal document that declares a person's wishes concerning the disposition of property, the guardianship of his or her children, and the administration of the estate after his or her death.

Any claim against the assetAnything owned that has monetary value.s of a person or corporation: accounts payable, wages, and salaries payable, dividendA pro rata portion of earnings distributed in cash by a corporation to its stockholders. In preferred stock, dividends are usually fixed; with common shares, dividends may vary with the fortunes of the company.s declared payable, accrued taxes payable, and fixed or long-term obligations such as mortgages, debentures, and bank loans.

In exchange for periodic payments (premiums), life insuranceIn exchange for periodic payments (premiums), life insurance provides financial compensation to a designated person or persons (beneficiaries) if the insured person dies. Typical uses of life insurance are to help cover final expenses and medical bills, pay off a mortgage and other debts, provide income for survivors and fund children's educations. provides financial compensation to a designated person or persons (beneficiaries) if the insured person dies. Typical uses of life insuranceIn exchange for periodic payments (premiums), life insurance provides financial compensation to a designated person or persons (beneficiaries) if the insured person dies. Typical uses of life insurance are to help cover final expenses and medical bills, pay off a mortgage and other debts, provide income for survivors and fund children's educations. are to help cover final expenses and medical bills, pay off a mortgage and other debts, provide income for survivors and fund children's educations.

Limited partnershipLimited partnerships pool the money of investors to develop or purchase income-producing properties. When the partnership subsequently receives income from these properties, it distributes the income to its investors as dividend payments.s pool the money of investors to develop or purchase income-producing properties. When the partnership subsequently receives income from these properties, it distributes the income to its investors as dividendA pro rata portion of earnings distributed in cash by a corporation to its stockholders. In preferred stock, dividends are usually fixed; with common shares, dividends may vary with the fortunes of the company. payments.

The ease with which an assetAnything owned that has monetary value. or securityEvidence of an investment, either in direct ownership (as with stocks), creditorship (as with bonds), or indirect ownership (as with options). can be converted into cash without loss of principalIn a security, the principal is the amount of money that is invested, excluding earnings. In a debt instrument such as a bond, it is the face amount..

A trustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation created by a person during his or her lifetime.

A type of insurance designed to help pay for services that provide assistance with specific Activities of Daily Living a person cannot perform by himself or herself. These services may be provided in an assisted living facility, nursing home, adult day care center or private home.

The disbursement of the entire value of a profit-sharing planAn agreement under which employees share in the profits of their employer. The company makes annual contributions to the employees' accounts. These funds usually accumulate tax deferred until the employee retires or leaves the company., pension plan, annuityAn insurance-based contract that provides future payments at regular intervals in exchange for current premiums. Annuity contracts are usually purchased from banks, credit unions, brokerage firms, or insurance companies., or similar account to the account owner or beneficiaryA person named in a life insurance policy, annuity, will, trust, or other agreement to receive a financial benefit upon the death of the owner. A beneficiary can be an individual, company, organization, and so on.. Lump-sum distributionThe disbursement of the entire value of a profit-sharing plan, pension plan, annuity, or similar account to the account owner or beneficiary. Lump-sum distributions may be rolled over into another tax-deferred account. s may be rolled over into another tax-deferred account.

The range of taxable incomeThe amount of income used to compute tax liability. It is determined by subtracting adjustments, itemized deductions or the standard deduction, and personal exemptions from gross income. that is taxable at a certain rate. Currently, there are six marginal tax bracketThe range of taxable income that is taxable at a certain rate. Currently, there are six marginal tax brackets: 10 percent, 15 percent, 25 percent, 28 percent, 33 percent, and 35 percent.s: 10 percent, 15 percent, 25 percent, 28 percent, 33 percent, and 35 percent.

A provision of the tax codes that allows all assetAnything owned that has monetary value.s of a deceased spouse to pass to the surviving spouse free of estate taxUpon the death of a decedent, federal and state governments impose taxes on the value of the estate left to others (with limitations).es. This provision is also referred to as the unlimited marital deductionA provision of the tax codes that allows all assets of a deceased spouse to pass to the surviving spouse free of estate taxes. This provision is also referred to as the unlimited marital deduction..

The amount of income that determines how much of an individual's IRAContributions to a traditional IRA are deductible from earned income in the calculation of federal and state income taxes if the taxpayer meets certain requirements. The earnings accumulate tax deferred until withdrawn, and then they are taxed as ordinary income. Individuals not eligible to make deductible contributions may make nondeductible contributions, the earnings on which would be tax deferred. contribution is deductible. The modified adjusted gross incomeThe amount of income that determines how much of an individual's IRA contribution is deductible. The modified adjusted gross income 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. is found by taking the individual's adjusted gross incomeAn interim calculation in the computation of income tax liability. It is computed by subtracting certain allowable adjustments from gross income. and adding back certain items such as foreign income, foreign housing deductionAn amount that can be subtracted from gross income, from a gross estate, or from a gift, thereby lowering the amount on which tax is assessed.s, student-loan deductionAn amount that can be subtracted from gross income, from a gross estate, or from a gift, thereby lowering the amount on which tax is assessed.s, IRAContributions to a traditional IRA are deductible from earned income in the calculation of federal and state income taxes if the taxpayer meets certain requirements. The earnings accumulate tax deferred until withdrawn, and then they are taxed as ordinary income. Individuals not eligible to make deductible contributions may make nondeductible contributions, the earnings on which would be tax deferred.-contribution deductionAn amount that can be subtracted from gross income, from a gross estate, or from a gift, thereby lowering the amount on which tax is assessed.s and deductionAn amount that can be subtracted from gross income, from a gross estate, or from a gift, thereby lowering the amount on which tax is assessed.s for higher-education costs.

A mutual fundA collection of stocks, bonds, or other securities purchased and managed by an investment company with funds from a group of investors. that specializes in investing in short-term securities and that tries to maintain a constant net asset valueThe price at which a mutual fund sells or redeems its shares. The net asset value is calculated by dividing the net market value of the fund's assets by the number of outstanding shares. of $1.

An interest-bearing, FDICFederal Deposit Insurance Corporation, an independent agency of the U.S. federal government that preserves and promotes public confidence in the U.S. financial system by insuring deposits in banks and thrift institutions for at least $100,000; by identifying, monitoring and addressing risks to the deposit insurance funds; and by limiting the effect on the economy and the financial system when a bank or thrift institution fails. Since the start of FDIC insurance on January 1, 1934 in response to the thousands of bank failures in the 1920s and early 1930s, no depositor has lost a single cent of insured funds as a result of a bank failure.-insured bank account that offers many of the same services as checking accounts, although transactions may be somewhat limited. Very safe and highly liquid, money market accounts can be used to establish an emergency savings fund and are a convenient place to store money for a planned major purchase or investment. (Not to be confused with "money market fundA mutual fund that specializes in investing in short-term securities and that tries to maintain a constant net asset value of $1.," a type of mutual fundA collection of stocks, bonds, or other securities purchased and managed by an investment company with funds from a group of investors. that invests in short-term securities and is not FDICFederal Deposit Insurance Corporation, an independent agency of the U.S. federal government that preserves and promotes public confidence in the U.S. financial system by insuring deposits in banks and thrift institutions for at least $100,000; by identifying, monitoring and addressing risks to the deposit insurance funds; and by limiting the effect on the economy and the financial system when a bank or thrift institution fails. Since the start of FDIC insurance on January 1, 1934 in response to the thousands of bank failures in the 1920s and early 1930s, no depositor has lost a single cent of insured funds as a result of a bank failure.-insured.)

A debt securityEvidence of an investment, either in direct ownership (as with stocks), creditorship (as with bonds), or indirect ownership (as with options). issued by municipalities. The income from municipal bondA debt security issued by municipalities. The income from municipal bonds is usually exempt from federal income taxes. In many states, it is also exempt from state income taxes in the state in which the municipal bond is issued.s is usually exempt from federal income taxes. In many states, it is also exempt from state income taxes in the state in which the municipal bondA debt security issued by municipalities. The income from municipal bonds is usually exempt from federal income taxes. In many states, it is also exempt from state income taxes in the state in which the municipal bond is issued. is issued.

A mutual fundA collection of stocks, bonds, or other securities purchased and managed by an investment company with funds from a group of investors. that specializes in investing in municipal bondA debt security issued by municipalities. The income from municipal bonds is usually exempt from federal income taxes. In many states, it is also exempt from state income taxes in the state in which the municipal bond is issued.s.

A collection of stocks, bondA bond is evidence of a debt in which the issuer promises to pay the bondholders a specified amount of interest and to repay the principal at maturity. Bonds are usually issued in multiples of $1,000.s, or other securities purchased and managed by an investment company with funds from a group of investors.

National Association of Securities Dealers Automatic Quotation system, an electronic quotation system that provides securities brokers with price quotations for stocks traded over the counter.

The price at which a mutual fundA collection of stocks, bonds, or other securities purchased and managed by an investment company with funds from a group of investors. sells or redeems its shares. The net asset valueThe price at which a mutual fund sells or redeems its shares. The net asset value is calculated by dividing the net market value of the fund's assets by the number of outstanding shares. is calculated by dividing the net market value of the fund's assetAnything owned that has monetary value.s by the number of outstanding shares.

A trustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation created by a charitable organization that combines the contributions of several donors and distributes income to those donors based on the earnings of the trustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation . The trustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation is managed by the charitable organization, and contributions are partially deductible for income tax purposes.

All the investments held by an individual or a mutual fundA collection of stocks, bonds, or other securities purchased and managed by an investment company with funds from a group of investors..

Designed to maintain the asset allocationThe process of repositioning assets within a portfolio to maximize return for a given level of risk. This process is usually done using the historical performance of the asset classes within sophisticated mathematical models. and diversificationInvesting in different companies, industries, or asset classes. Diversification may also mean the participation of a large corporation in a wide range of business activities. that align with an investor's tolerance for riskThe chance that an investor will lose all or part of an investment. and expectations for returns. As market conditions change over time, assetAnything owned that has monetary value.s may be sold from funds that exceed their recommended allocation, with the proceeds used to purchase funds that have dropDROP is a program under which you may retire and have your monthly retirement benefits remain in the Florida Retirement System (FRS) Trust Fund instead of being paid directly to you or deposited in your bank.ped below their recommended allocation.

A class of stock with claim to a company's earnings, before payment can be made on the common stockA unit of ownership in a corporation. Common stockholders participate in the corporation's profits or losses by receiving dividends and by capital gains or losses in the stock's share price., and that is usually entitled to priority over common stockA unit of ownership in a corporation. Common stockholders participate in the corporation's profits or losses by receiving dividends and by capital gains or losses in the stock's share price. if the company liquidates. Generally, preferred stockA class of stock with claim to a company's earnings, before payment can be made on the common stock, and that is usually entitled to priority over common stock if the company liquidates. Generally, preferred stocks pay dividends at a fixed rate.s pay dividendA pro rata portion of earnings distributed in cash by a corporation to its stockholders. In preferred stock, dividends are usually fixed; with common shares, dividends may vary with the fortunes of the company.s at a fixed rate.

A legal agreement arranged before marriage stating who owns property acquired before marriage and during marriage and how property will be divided in the event of divorce. ERISAThe Employee Retirement Income Security Act is a federal law covering all aspects of employee retirement plans. If employers provide plans, they must be adequately funded and provide for vesting, survivor's rights, and disclosures. benefits are not affected by prenuptial agreementA legal agreement arranged before marriage stating who owns property acquired before marriage and during marriage and how property will be divided in the event of divorce. ERISA benefits are not affected by prenuptial agreements.s.

The market price of a stock divided by the company's annual earnings per share. Because the P/E ratioThe market price of a stock divided by the company's annual earnings per share. Because the P/E ratio is a widely regarded yardstick for investors, it often appears with stock price quotations. is a widely regarded yardstick for investors, it often appears with stock price quotations.

In a securityEvidence of an investment, either in direct ownership (as with stocks), creditorship (as with bonds), or indirect ownership (as with options)., the principalIn a security, the principal is the amount of money that is invested, excluding earnings. In a debt instrument such as a bond, it is the face amount. is the amount of money that is invested, excluding earnings. In a debt instrument such as a bondA bond is evidence of a debt in which the issuer promises to pay the bondholders a specified amount of interest and to repay the principal at maturity. Bonds are usually issued in multiples of $1,000., it is the face amount.

The court-supervised process in which a decedent's estate is settled and distributed.

An agreement under which employees share in the profits of their employer. The company makes annual contributions to the employees' accounts. These funds usually accumulate tax deferredInterest, dividends, or capital gains that grow untaxed in certain accounts or plans until they are withdrawn. until the employee retires or leaves the company.

A type of insurance designed to compensate policyholders for loss of or damage to property such as a home, vehicle or personal possessions. P&C insurance often includes a deductible the amount of a loss that an insurance policyholder has to pay out-of-pocket before reimbursement from the insurer begins.

A document provided by mutual fundA collection of stocks, bonds, or other securities purchased and managed by an investment company with funds from a group of investors. companies to prospective investors. The prospectusA document provided by mutual fund companies to prospective investors. The prospectus gives information needed by investors to make informed decisions prior to investing in a specific mutual fund. The prospectus includes information on the minimum investment amount, the fund's objectives, past performance, risk level, sales charges, management fees, and any other expense information about the fund, as well as a description of the services provided to investors in the fund. gives information needed by investors to make informed decisions prior to investing in a specific mutual fundA collection of stocks, bonds, or other securities purchased and managed by an investment company with funds from a group of investors.. The prospectusA document provided by mutual fund companies to prospective investors. The prospectus gives information needed by investors to make informed decisions prior to investing in a specific mutual fund. The prospectus includes information on the minimum investment amount, the fund's objectives, past performance, risk level, sales charges, management fees, and any other expense information about the fund, as well as a description of the services provided to investors in the fund. includes information on the minimum investment amount, the fund's objectives, past performance, riskThe chance that an investor will lose all or part of an investment. level, sales charges, management fees, and any other expense information about the fund, as well as a description of the services provided to investors in the fund.

At the time of divorce, this order would be issued by a state domestic relations court and would require that an employee's ERISAThe Employee Retirement Income Security Act is a federal law covering all aspects of employee retirement plans. If employers provide plans, they must be adequately funded and provide for vesting, survivor's rights, and disclosures. retirement plan accrued benefits be divided between the employee and the spouse.

A pension, profit-sharing, or qualified savings plan that is established by an employer for the benefit of the employees. These plans must be established in conformity with IRS rules. Contributions accumulate tax deferredInterest, dividends, or capital gains that grow untaxed in certain accounts or plans until they are withdrawn. until withdrawn and are deductible to the employer as a current business expense.

Also known as Section 529 PlanSee Qualified tuition programs.s, these programs allow tax-deferred earnings and tax-free distributions for qualified post-secondary (college) education expenses only. Prepaid tuition plans and college savings plans are two types of qualified tuition programsAlso known as Section 529 Plans, these programs allow tax-deferred earnings and tax-free distributions for qualified post-secondary (college) education expenses only. Prepaid tuition plans and college savings plans are two types of qualified tuition programs. Note: An investor should consider the investment objectives, risks, and charges and expenses associated with investing in 529 Plans or other securities before investing. Prior to investing in a 529 Plan, an investor should also consider whether the investor's or designated beneficiary's home state offers any state tax or other benefits that are only available for investments is such state's qualified tuition program. More information about 529 Plans is available in the issuer's official statement. The official statement should be read carefully before investing.. Note: An investor should consider the investment objectives, riskThe chance that an investor will lose all or part of an investment.s, and charges and expenses associated with investing in 529 Plans or other securities before investing. Prior to investing in a 529 Plan, an investor should also consider whether the investor's or designated beneficiaryA person named in a life insurance policy, annuity, will, trust, or other agreement to receive a financial benefit upon the death of the owner. A beneficiary can be an individual, company, organization, and so on.'s home state offers any state tax or other benefits that are only available for investments is such state's qualified tuition program. More information about 529 Plans is available in the issuer's official statement. The official statement should be read carefully before investing.

A trustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation in which the creator reserves the right to modify or terminate the trustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation .

The chance that an investor will lose all or part of an investment.

Refers to the assumption that rational investors will choose the securityEvidence of an investment, either in direct ownership (as with stocks), creditorship (as with bonds), or indirect ownership (as with options). with the least riskThe chance that an investor will lose all or part of an investment. if they can maintain the same return. As the level of riskThe chance that an investor will lose all or part of an investment. goes up, so must the expected return on the investment.

A method by which an individual can transfer the assetAnything owned that has monetary value.s from one retirement program to another without the recognition of income for tax purposes. The requirements for a rolloverA method by which an individual can transfer the assets from one retirement program to another without the recognition of income for tax purposes. The requirements for a rollover depend on the type of program from which the distribution is made and the type of program receiving the distribution. depend on the type of program from which the distribution is made and the type of program receiving the distribution.

A nondeductible IRAContributions to a traditional IRA are deductible from earned income in the calculation of federal and state income taxes if the taxpayer meets certain requirements. The earnings accumulate tax deferred until withdrawn, and then they are taxed as ordinary income. Individuals not eligible to make deductible contributions may make nondeductible contributions, the earnings on which would be tax deferred. that allows tax-free withdrawals when certain conditions are met. Income and contribution limits apply.

An indexA calculation that uses a selection of stocks or bonds to gauge a certain market. The Dow Jones Industrial Average, for example, is an index of 30 large industrial companies on the New York Stock Exchange. of 500 widely held common stockA unit of ownership in a corporation. Common stockholders participate in the corporation's profits or losses by receiving dividends and by capital gains or losses in the stock's share price.s on the New York Stock Exchange (NYSE), compiled by Standard & Poor's Corporation, a provider of independent investment research and data. The S&P 500An index of 500 widely held common stocks on the New York Stock Exchange (NYSE), compiled by Standard & Poor's Corporation, a provider of independent investment research and data. The S&P 500 is used as a measure to indicate the overall health of the US stock market. is used as a measure to indicate the overall health of the US stock market.

See Qualified tuition programsAlso known as Section 529 Plans, these programs allow tax-deferred earnings and tax-free distributions for qualified post-secondary (college) education expenses only. Prepaid tuition plans and college savings plans are two types of qualified tuition programs. Note: An investor should consider the investment objectives, risks, and charges and expenses associated with investing in 529 Plans or other securities before investing. Prior to investing in a 529 Plan, an investor should also consider whether the investor's or designated beneficiary's home state offers any state tax or other benefits that are only available for investments is such state's qualified tuition program. More information about 529 Plans is available in the issuer's official statement. The official statement should be read carefully before investing..

A loan for which the borrower pledges a tangible assetAnything owned that has monetary value. (collateral), such as a home, vehicle or other personal property. If the borrower defaults (does not make payments according to terms of the loan), the lender may claim and sell the assetAnything owned that has monetary value. to recoup its money. Mortgage loans, which are secured by the real property, and auto loans, which are secured by the vehicle, are two common types of secured loanA loan for which the borrower pledges a tangible asset (collateral), such as a home, vehicle or other personal property. If the borrower defaults (does not make payments according to terms of the loan), the lender may claim and sell the asset to recoup its money. Mortgage loans, which are secured by the real property, and auto loans, which are secured by the vehicle, are two common types of secured loan..

An independent U.S. federal agency that regulates and supervises the U.S. securities industry. The SEC administers federal laws, develops and enforces rules to protect investors against malpractice, and seeks to ensure that companies provide full disclosure to investors.

Evidence of an investment, either in direct ownership (as with stocks), creditorship (as with bondA bond is evidence of a debt in which the issuer promises to pay the bondholders a specified amount of interest and to repay the principal at maturity. Bonds are usually issued in multiples of $1,000.s), or indirect ownership (as with options).

A type of plan under which the employer contributes to an employee's IRAContributions to a traditional IRA are deductible from earned income in the calculation of federal and state income taxes if the taxpayer meets certain requirements. The earnings accumulate tax deferred until withdrawn, and then they are taxed as ordinary income. Individuals not eligible to make deductible contributions may make nondeductible contributions, the earnings on which would be tax deferred.. Contributions may be made up to a certain limit and are immediately vested.

An insurance-based contract that provides future payments at regular intervals in exchange for current premiums. Generally used as a supplement to retirement income and pays over the life of one individual, usually the retiree, with no rights of payment to any survivor.

An arrangement under which two parties (usually a corporation and employee) share the cost of a life insuranceIn exchange for periodic payments (premiums), life insurance provides financial compensation to a designated person or persons (beneficiaries) if the insured person dies. Typical uses of life insurance are to help cover final expenses and medical bills, pay off a mortgage and other debts, provide income for survivors and fund children's educations. policy and split the proceeds.

An IRAContributions to a traditional IRA are deductible from earned income in the calculation of federal and state income taxes if the taxpayer meets certain requirements. The earnings accumulate tax deferred until withdrawn, and then they are taxed as ordinary income. Individuals not eligible to make deductible contributions may make nondeductible contributions, the earnings on which would be tax deferred. designed for a spouse with no earned income. Between a spousal IRAAn IRA designed for a spouse with no earned income. Between a spousal IRA and a regular IRA, the maximum combined contribution that a couple can make is $10,000 in 2008 ($11,000 if one spouse is age 50 or older or $12,000 if both are age 50 or older) or 100 percent of earned income, whichever is less. This total may be split between the two IRAs as the couple wishes, provided the contribution to either IRA does not exceed $5,000 ($6,000 for those aged 50 or older). and a regular IRAContributions to a traditional IRA are deductible from earned income in the calculation of federal and state income taxes if the taxpayer meets certain requirements. The earnings accumulate tax deferred until withdrawn, and then they are taxed as ordinary income. Individuals not eligible to make deductible contributions may make nondeductible contributions, the earnings on which would be tax deferred., the maximum combined contribution that a couple can make is $10,000 in 2008 ($11,000 if one spouse is age 50 or older or $12,000 if both are age 50 or older) or 100 percent of earned income, whichever is less. This total may be split between the two IRAContributions to a traditional IRA are deductible from earned income in the calculation of federal and state income taxes if the taxpayer meets certain requirements. The earnings accumulate tax deferred until withdrawn, and then they are taxed as ordinary income. Individuals not eligible to make deductible contributions may make nondeductible contributions, the earnings on which would be tax deferred.s as the couple wishes, provided the contribution to either IRAContributions to a traditional IRA are deductible from earned income in the calculation of federal and state income taxes if the taxpayer meets certain requirements. The earnings accumulate tax deferred until withdrawn, and then they are taxed as ordinary income. Individuals not eligible to make deductible contributions may make nondeductible contributions, the earnings on which would be tax deferred. does not exceed $5,000 ($6,000 for those aged 50 or older).

The range of taxable incomeThe amount of income used to compute tax liability. It is determined by subtracting adjustments, itemized deductions or the standard deduction, and personal exemptions from gross income. that is taxed at a certain rate. Brackets are expressed by their marginal rate.

Tax creditTax credits, the most appealing type of tax deductions, are subtracted directly, dollar for dollar, from your income tax bill.s, the most appealing type of tax deductionAn amount that can be subtracted from gross income, from a gross estate, or from a gift, thereby lowering the amount on which tax is assessed.s, are subtracted directly, dollar for dollar, from your income tax bill.

Interest, dividendA pro rata portion of earnings distributed in cash by a corporation to its stockholders. In preferred stock, dividends are usually fixed; with common shares, dividends may vary with the fortunes of the company.s, or capital gainThe difference between the sales price and the purchase price of a capital asset. When that difference is positive, the difference is referred to as a capital gain. When the difference is negative, it is a capital loss.s that grow untaxed in certain accounts or plans until they are withdrawn.

Under certain conditions, the interest from bondA bond is evidence of a debt in which the issuer promises to pay the bondholders a specified amount of interest and to repay the principal at maturity. Bonds are usually issued in multiples of $1,000.s issued by states, cities, and certain other government agencies is exempt from federal income taxes. In many states, the interest from tax-exempt bondsUnder certain conditions, the interest from bonds issued by states, cities, and certain other government agencies is exempt from federal income taxes. In many states, the interest from tax-exempt bonds will also be exempt from state and local income taxes. will also be exempt from state and local income taxes.

The amount of income used to compute tax liabilityAny claim against the assets of a person or corporation: accounts payable, wages, and salaries payable, dividends declared payable, accrued taxes payable, and fixed or long-term obligations such as mortgages, debentures, and bank loans.. It is determined by subtracting adjustments, itemized deductionAn amount that can be subtracted from gross income, from a gross estate, or from a gift, thereby lowering the amount on which tax is assessed.s or the standard deductionAn amount that can be subtracted from gross income, from a gross estate, or from a gift, thereby lowering the amount on which tax is assessed., and personal exemptions from gross income.

An approach to investing in stocks in which a stock's past performance is mapped onto charts. These charts are examined to find familiar patterns to use as an indicator of the stock's future performance.

A form of co-ownership. Upon the death of a co-owner, his or her interest passes to his or her chosen beneficiaries and not to the surviving owner or owners.

Term life insuranceIn exchange for periodic payments (premiums), life insurance provides financial compensation to a designated person or persons (beneficiaries) if the insured person dies. Typical uses of life insurance are to help cover final expenses and medical bills, pay off a mortgage and other debts, provide income for survivors and fund children's educations. provides a death benefit if the insured dies. Term insuranceTerm life insurance provides a death benefit if the insured dies. Term insurance does not accumulate cash value and ends after a certain number of years or at a certain age. does not accumulate cash value and ends after a certain number of years or at a certain age.

A trustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation established by a will that takes effect upon death.

One who has made a will or who dies having left a will.

The total of all earnings from a given investment, including dividendA pro rata portion of earnings distributed in cash by a corporation to its stockholders. In preferred stock, dividends are usually fixed; with common shares, dividends may vary with the fortunes of the company.s, interest, and any capital gainThe difference between the sales price and the purchase price of a capital asset. When that difference is positive, the difference is referred to as a capital gain. When the difference is negative, it is a capital loss..

A legal entity created by an individual in which one person or institution holds the right to manage property or assetAnything owned that has monetary value.s for the benefit of someone else. Types of trustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation s include: Testamentary TrustA trust established by a will that takes effect upon death. A trustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation established by a will that takes effect upon death; Living TrustA trust created by a person during his or her lifetime. A trustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation created by a person during his or her lifetime; Revocable TrustA trust in which the creator reserves the right to modify or terminate the trust. A trustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation in which the creator reserves the right to modify or terminate the trustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation ; Irrevocable TrustA trust that may not be modified or terminated by the trustor after its creation. A trustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation that may not be modified or terminated by the trustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation or after its creation

An individual or institution appointed to administer a trustA legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust A trust established by a will that takes effect upon death; Living Trust A trust created by a person during his or her lifetime; Revocable Trust A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust A trust that may not be modified or terminated by the trustor after its creation for its beneficiaries.

A method of transferring retirement plan assetAnything owned that has monetary value.s from one employer's plan to another employer plan or to an IRAContributions to a traditional IRA are deductible from earned income in the calculation of federal and state income taxes if the taxpayer meets certain requirements. The earnings accumulate tax deferred until withdrawn, and then they are taxed as ordinary income. Individuals not eligible to make deductible contributions may make nondeductible contributions, the earnings on which would be tax deferred.. One benefit of this method is that no federal income tax will be withheld by the trusteeAn individual or institution appointed to administer a trust for its beneficiaries. of the first plan.

A type of life insuranceIn exchange for periodic payments (premiums), life insurance provides financial compensation to a designated person or persons (beneficiaries) if the insured person dies. Typical uses of life insurance are to help cover final expenses and medical bills, pay off a mortgage and other debts, provide income for survivors and fund children's educations. that combines a death benefit with a savings element which accumulates tax deferredInterest, dividends, or capital gains that grow untaxed in certain accounts or plans until they are withdrawn. at current interest rates. Under a universal life insuranceA type of life insurance that combines a death benefit with a savings element which accumulates tax deferred at current interest rates. Under a universal life insurance policy, the policyholder can increase or decrease his or her coverage, with limitations, without purchasing a new policy. policy, the policyholder can increase or decrease his or her coverage, with limitations, without purchasing a new policy.

A type of annuityAn insurance-based contract that provides future payments at regular intervals in exchange for current premiums. Annuity contracts are usually purchased from banks, credit unions, brokerage firms, or insurance companies. that allows for the investment of assetAnything owned that has monetary value.s in various portfolioAll the investments held by an individual or a mutual fund.s of stocks, bondA bond is evidence of a debt in which the issuer promises to pay the bondholders a specified amount of interest and to repay the principal at maturity. Bonds are usually issued in multiples of $1,000.s and cash. The return on assetAnything owned that has monetary value.s is not guaranteed as in a fixed annuityAn annuity that guarantees a specific rate of return and a fixed payment, either for the annuitant's lifetime (the surviving spouse's, in the case of a married couple's joint annuity) or for a specified period. (Guarantee depends on the claims-paying ability of the issuing insurance company and does not apply to the investment return or principal value of the separate account.), but will fluctuate in value over time, reflecting the performance of the investment portfolioAll the investments held by an individual or a mutual fund.s chosen. Variable annuities provide a death benefit, meaning that if the annuityAn insurance-based contract that provides future payments at regular intervals in exchange for current premiums. Annuity contracts are usually purchased from banks, credit unions, brokerage firms, or insurance companies. holder dies before the insurer begins making payments, the beneficiaryA person named in a life insurance policy, annuity, will, trust, or other agreement to receive a financial benefit upon the death of the owner. A beneficiary can be an individual, company, organization, and so on. is guaranteed to receive a specified amount typically at least the amount of the purchase payment or premiums. Variable annuities are also tax-deferred, meaning that the annuityAn insurance-based contract that provides future payments at regular intervals in exchange for current premiums. Annuity contracts are usually purchased from banks, credit unions, brokerage firms, or insurance companies. holder pays no taxes on the income and investment gains from the annuityAn insurance-based contract that provides future payments at regular intervals in exchange for current premiums. Annuity contracts are usually purchased from banks, credit unions, brokerage firms, or insurance companies. until withdrawals begin.

A type of life insuranceIn exchange for periodic payments (premiums), life insurance provides financial compensation to a designated person or persons (beneficiaries) if the insured person dies. Typical uses of life insurance are to help cover final expenses and medical bills, pay off a mortgage and other debts, provide income for survivors and fund children's educations. that combines a death benefit with a savings element that accumulates tax deferredInterest, dividends, or capital gains that grow untaxed in certain accounts or plans until they are withdrawn.. Under a variable universal life insuranceA type of life insurance that combines a death benefit with a savings element that accumulates tax deferred. Under a variable universal life insurance policy, the cash value in the policy can be placed in a variety of subaccounts with different investment objectives. The policyholder can transfer funds among the subaccounts as he or she wishes. Fees are charged after a certain number of transfers. policy, the cash value in the policy can be placed in a variety of subaccounts with different investment objectives. The policyholder can transfer funds among the subaccounts as he or she wishes. Fees are charged after a certain number of transfers.

The range of price swings of a securityEvidence of an investment, either in direct ownership (as with stocks), creditorship (as with bonds), or indirect ownership (as with options). or market over time.

An employee benefit plan that provides such benefits as medical, sickness, accident, disability, death, or unemployment benefits.

A type of life insuranceIn exchange for periodic payments (premiums), life insurance provides financial compensation to a designated person or persons (beneficiaries) if the insured person dies. Typical uses of life insurance are to help cover final expenses and medical bills, pay off a mortgage and other debts, provide income for survivors and fund children's educations. that offers a death benefit and also accumulates cash value, tax deferredInterest, dividends, or capital gains that grow untaxed in certain accounts or plans until they are withdrawn. at fixed interest rates. Whole life insuranceA type of life insurance that offers a death benefit and also accumulates cash value, tax deferred at fixed interest rates. Whole life insurance policies generally have a fixed annual premium that does not rise over the duration of the policy. Whole life insurance is also referred to as "ordinary" or "straight" life insurance. policies generally have a fixed annual premium that does not rise over the duration of the policy. Whole life insuranceA type of life insurance that offers a death benefit and also accumulates cash value, tax deferred at fixed interest rates. Whole life insurance policies generally have a fixed annual premium that does not rise over the duration of the policy. Whole life insurance is also referred to as "ordinary" or "straight" life insurance. is also referred to as "ordinary" or "straight" life insuranceIn exchange for periodic payments (premiums), life insurance provides financial compensation to a designated person or persons (beneficiaries) if the insured person dies. Typical uses of life insurance are to help cover final expenses and medical bills, pay off a mortgage and other debts, provide income for survivors and fund children's educations..

In general, the yieldIn general, the yield is the amount of current income provided by an investment. For stocks, the yield is calculated by dividing the total of the annual dividends by the current price. For bonds, the yield is calculated by dividing the annual interest by the current price. The yield is distinguished from the return, which includes price appreciation or depreciation. is the amount of current income provided by an investment. For stocks, the yieldIn general, the yield is the amount of current income provided by an investment. For stocks, the yield is calculated by dividing the total of the annual dividends by the current price. For bonds, the yield is calculated by dividing the annual interest by the current price. The yield is distinguished from the return, which includes price appreciation or depreciation. is calculated by dividing the total of the annual dividendA pro rata portion of earnings distributed in cash by a corporation to its stockholders. In preferred stock, dividends are usually fixed; with common shares, dividends may vary with the fortunes of the company.s by the current price. For bondA bond is evidence of a debt in which the issuer promises to pay the bondholders a specified amount of interest and to repay the principal at maturity. Bonds are usually issued in multiples of $1,000.s, the yieldIn general, the yield is the amount of current income provided by an investment. For stocks, the yield is calculated by dividing the total of the annual dividends by the current price. For bonds, the yield is calculated by dividing the annual interest by the current price. The yield is distinguished from the return, which includes price appreciation or depreciation. is calculated by dividing the annual interest by the current price. The yieldIn general, the yield is the amount of current income provided by an investment. For stocks, the yield is calculated by dividing the total of the annual dividends by the current price. For bonds, the yield is calculated by dividing the annual interest by the current price. The yield is distinguished from the return, which includes price appreciation or depreciation. is distinguished from the return, which includes price appreciation or depreciation.

This type of bondA bond is evidence of a debt in which the issuer promises to pay the bondholders a specified amount of interest and to repay the principal at maturity. Bonds are usually issued in multiples of $1,000. makes no periodic interest payments but instead is sold at a steep discount from its face value. BondA bond is evidence of a debt in which the issuer promises to pay the bondholders a specified amount of interest and to repay the principal at maturity. Bonds are usually issued in multiples of $1,000.holders receive the face value of their bondA bond is evidence of a debt in which the issuer promises to pay the bondholders a specified amount of interest and to repay the principal at maturity. Bonds are usually issued in multiples of $1,000.s when they mature.