retirement account
A special savings account the government created to help people save money for when they stop working. It comes with tax benefits that a regular bank account does not have.
Where it is explained in full
The health savings account: three tax breaks and one gate. The account people describe with the most excitement and understand the least. It does something no other account does, and there is a gate in front of it that many people cannot walk through.
Workplace plans: the 401(k), the 403(b), and the TSP, from the first paycheck to the last. Everything a person needs to open one, fill it, hold the right things in it, avoid the traps, and carry it with them when they leave. Long on purpose, so that one page is enough.
Funds: what you actually own when you buy one. Both kinds are baskets. The differences are in how you buy them, how they are priced, how they handle taxes, and what it costs to hold them for decades.
Spreading it out and betting big: what each one protects you from. Owning many things removes one kind of risk and leaves another one completely untouched. Knowing which is which keeps the word from turning into a slogan.
A definition says what a thing is; it never says whether it fits you. The guides explain how it works and name the professional who confirms it for a particular person. The No Advice Disclosure.
Words beside it
- ABLE account
A special savings account created by federal law that lets people with disabilities save money without losing government benefits or paying tax on the growth.
- accounting software
This is a program that records the money moving through a business, such as sales, bills, and payments. It sorts each item into a category and builds reports showing what the business earned and spent.
- Custodial account (UTMA/UGMA)
An account you manage for a child that becomes theirs outright at adulthood.
- health savings account
A special bank account the government allows you to open so you can save money specifically for medical costs and get tax benefits while doing it.
- High yield savings account
A savings account paying a competitive rate, usually online.
- mental accounting
This is the habit of treating money differently depending on where it came from or what you plan to use it for. For example, people may spend a tax refund freely but guard money in a savings jar, even though a dollar is worth the same either way.
- tax advantaged account
Any savings or investment account where the government gives you a special tax break, like not taxing your earnings or letting you put money in before taxes are taken out.
Ask about retirement account
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