BASIC RETIREMENT TERMS
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Here is a glossary of some basic terms used in all areas of
? FICA: The Federal Insurance
Contributions Act. It requires that money be deducted from employee paychecks
and deposited into the Social Security trust fund. This money is used to support
retirees and some disabled persons and their dependents.
? Qualified: Able to receive
special tax benefits, such as deferral of taxes.
? Retirement: Termination of
employment due to choice, age, or physical limitation. Certain benefits, such as
Social Security payments, are available to those who retire and qualify.
? Retirement income: Unearned
income available to a person for retirement expenses. If retirement income comes
from a retirement plan or annuity, it will take effect at a required age. The
amount and how often it is paid are spelled out in the terms of the plan or
? Rollover: The moving of funds
from one retirement investment plan to another, usually of the same type.
? Social Security: The system of
government benefits that provides support to retirees, the disabled, needy
children, qualifiers for unemployment compensation, and certain others.
Deductions from payrolls finance all these programs.
The next section covers retirement plans offered as