A fuller guide to this term is on the way. In the meantime, the related terms below explain the ideas around it.
Related MoneyPedia terms
- PensionA retirement plan where your employer promises a set monthly payment for life, usually based on your salary and years worked.
- AnnuityA contract with an insurance company that converts a sum of money into a stream of steady payments over time.
- RolloverMoving money from one retirement account to another, such as a 401k into an IRA, without triggering taxes.
- Defined Benefit PlanAn employer plan that promises a specific retirement payout, with the company bearing the responsibility for funding it.
- Required Minimum Distribution (RMD)The minimum amount you are required to withdraw from certain retirement accounts each year once you reach a set age.
- Early Withdrawal PenaltyA fee a bank charges when you take money out of a certificate of deposit before its agreed-upon maturity date.
More in Retirement
Plain-English education — not personalized legal, tax, or investment advice.