Glossary

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Recession

A recession is a period of significant decline in economic activity. Although the exact definition varies, many experts consider a recession to be two consecutive quarters of decline in gross domestic product (GDP). As such, the market may experience major plunges and volatility over several months.

Roth IRA

A Roth IRA is a type of individual retirement account. When you have a Roth IRA, you contribute after-tax dollars — up to a certain limit every year. That money stays in your retirement investment account and can potentially earn investment returns as you work your way toward retirement.

Retained earnings

Retained earnings are the money that a business holds onto after the process of shareholder distributions. Retained earnings are important because they can fuel business stability and growth. Without retained earnings, the business may not have the funds it needs to invest in the future.

Required minimum distributions (RMDs)

RMDs are an annual amount retirees are required to withdraw from their tax-deferred accounts after reaching a certain age.

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Recent Terms

SEP IRA
A SEP IRA — short for simplified employee pension plan — is a tax-advantaged retirement plan designed for business owners. While it can be used by businesses of any size, it’s often used by small business owners and self-employed individuals.
High earner, not yet rich (HENRY)
HENRY is an acronym for "high earner, not yet rich." It is used to describe someone who earns a high income, usually between $100,000 to $500,000, but has not saved or invested enough to be considered rich. HENRYs typically spend a large portion of their earnings on expenses and purchases.
Non-deductible IRA
A non-deductible IRA is not a type of retirement account. Instead, it refers to non-deductible contributions made to a traditional retirement account. This retirement savings strategy is for those whose income exceeds the limits to make deductible IRA contributions or to contribute to a Roth IRA.