Financial Vocabulary

#421

Tax-deferred account

Example sentences

1. He saves for retirement in a tax-deferred account.
2. Money can grow before taxes are paid in a tax-deferred account.
3. Withdrawals from the tax-deferred account may be taxable later.

#

#422

Tax-exempt income

Example sentences

1. Some municipal bond interest is tax-exempt income.
2. She reported the tax-exempt income on the form.
3. Tax-exempt income is not included in some tax calculations.

#

#423

Tax avoidance

Example sentences

1. The company used legal planning for tax avoidance.
2. Tax avoidance follows the law but reduces tax.
3. The adviser explained the difference between tax avoidance and tax evasion.

#

#424

Tax evasion

Example sentences

1. Hiding income is a form of tax evasion.
2. Tax evasion is illegal.
3. The court punished the business owner for tax evasion.

#

#425

Adjusted gross income

Example sentences

1. Her adjusted gross income was $60,000.
2. Certain adjustments can reduce adjusted gross income.
3. The tax form uses adjusted gross income for several calculations.

#

#426

Retirement planning

Example sentences

1. Retirement planning helped her set a savings target.
2. He began retirement planning at age 30.
3. Good retirement planning considers income, health, and housing.

#

#427

Pension

Example sentences

1. Her pension pays a fixed amount each month.
2. He will receive a pension after leaving work.
3. The company pension supports workers in retirement.

#

#428

Defined-benefit plan

Example sentences

1. The defined-benefit plan promises a set retirement payment.
2. Her employer funds the defined-benefit plan.
3. The payment from a defined-benefit plan often depends on salary and service.

#

#429

Defined-contribution plan

Example sentences

1. He saves part of each paycheck in a defined-contribution plan.
2. The final value of a defined-contribution plan depends on contributions and returns.
3. Her employer adds money to the defined-contribution plan.

#

#430

401(k) plan

Example sentences

1. She contributes 5% of her salary to a 401(k) plan.
2. The employer matches part of her 401(k) plan contribution.
3. A 401(k) plan can help workers save for retirement.

#

#431

Individual retirement account

Example sentences

1. He opened an individual retirement account at a bank.
2. An individual retirement account offers tax benefits for retirement saving.
3. She adds money to her individual retirement account every month.

#

#432

Traditional IRA

Example sentences

1. He may receive a tax deduction for his Traditional IRA contribution.
2. Money in a Traditional IRA can grow before tax is paid.
3. Withdrawals from a Traditional IRA are usually taxed.

#

#433

Roth IRA

Example sentences

1. She contributes after-tax money to a Roth IRA.
2. Qualified Roth IRA withdrawals can be tax-free.
3. He opened a Roth IRA for long-term retirement savings.

#

#434

Employer match

Example sentences

1. Her company offers an employer match of 50%.
2. He contributes enough to receive the full employer match.
3. An employer match adds extra money to retirement savings.

#

#435

Vesting

Example sentences

1. Full vesting takes five years at the company.
2. After vesting, she can keep all employer contributions.
3. He checked the vesting schedule before leaving his job.

#

#436

Retirement income

Example sentences

1. Her retirement income comes from savings and a pension.
2. They calculated how much retirement income they will need.
3. Regular retirement income helps cover monthly expenses.

#

#437

Required minimum distribution

Example sentences

1. He took his required minimum distribution from the retirement account.
2. A required minimum distribution usually begins at a certain age.
3. The bank calculated the required minimum distribution for the year.

#

#438

Social Security

Example sentences

1. She expects Social Security to provide part of her retirement income.
2. Workers pay into Social Security through payroll taxes.
3. He checked his estimated Social Security benefit online.

#

#439

Annuity payout

Example sentences

1. The annuity payout arrives every month.
2. She chose a lifetime annuity payout.
3. The size of the annuity payout depends on the contract.

#

#440

Estate planning

Example sentences

1. Estate planning helped him decide who will receive his property.
2. She met a lawyer for estate planning.
3. Estate planning can include a will and a trust.

#