Financial terms,
explained.

The 4% rule says to withdraw 4% of your savings in year one, then raise that amount with inflation. See it step by step, where it came from and when it fails.

The 10-year rule makes most heirs empty an inherited IRA within a decade. Learn who it covers, when annual RMDs apply in 2026, and how to time withdrawals.

The 50/30/20 rule splits after-tax income into 50% needs, 30% wants and 20% savings. See what counts in each bucket, a worked example, and when to adjust it.

A 60/40 portfolio holds 60% stocks and 40% bonds. See how the split works, its pros and cons, what 2022 exposed and how to rebalance it with a formula.

72(t) distributions, or SEPPs, let you draw from an IRA or old 401(k) before 59½ without the 10% penalty. See the three IRS methods, the 5% cap and lock-in.

Bob Clyatt’s 95% rule explained: spend a share of the portfolio each year, but never cut more than 5% below the previous year’s portfolio-funded amount.

A 401(k) is a workplace retirement plan funded from your paycheck. See how it works, the 2026 limits, early access, job-change rollovers and 401(k) vs. IRA.

A 401(k) match is money your employer adds when you contribute. Learn how match formulas work, how to calculate yours, vesting, true-ups and 2026 limits.

A 403(b) is the retirement plan for public schools, hospitals and nonprofits. See the 2026 limits, the 15-year catch-up, 401(k) differences and fee traps.

A 457(b) plan is deferred compensation for public and some nonprofit workers. See its separate 2026 limit, the 3-year catch-up and why it has no 10% penalty.

A 529 plan grows education savings free of federal tax. Learn what it pays for in 2026, how withdrawals are taxed, and how leftovers can roll to a Roth IRA.

A 1031 exchange defers tax on selling investment real estate when you reinvest in like-kind property. Learn the 45- and 180-day deadlines, boot and basis.

An ABLE account lets people with disabilities save without losing SSI or Medicaid. See who qualifies in 2026, the $20,000 limit and how withdrawals work.

The ACA Marketplace is where you buy your own health insurance. Learn the 2027 enrollment dates, metal tiers, who gets help paying and how to compare plans.

Adjusted gross income (AGI) is total income minus adjustments like HSA and IRA deductions. Learn how to calculate it, where to find it and what it controls.

After-tax 401(k) contributions are taxed going in, but their growth isn’t tax-free. See how they differ from Roth, the 2026 limits and how withdrawals work.

The alternative minimum tax (AMT) is a parallel federal tax with its own exemption and 26%/28% rates. See the 2026 exemption, who owes it and how to limit it.

Amortization is repaying a loan with level payments split between interest and principal. See the formula, a 30-year schedule and what extra payments save.

APR is the yearly cost of credit, including points and certain fees. See how it’s figured, what it omits, when a lower APR costs more and how card APRs work.

An annuity is an insurance contract that trades a premium for tax-deferred growth or lifetime income. Compare the four types, their taxes, fees and risks.

An asset is anything you own with economic value. See the main types, how to value each at fair market value, which gain or lose value, and how each is taxed.

Asset allocation is how you split investments among stocks, bonds and cash. Learn what sets your mix, strategic vs. tactical methods and a worked example.

Asset location is choosing which account holds each investment so the same mix pays less tax. See where stocks and bonds usually go and a worked example.

An AUM fee is an adviser’s yearly charge set as a percentage of assets managed. See typical rates, how tiered billing works and what 1% costs over 30 years.

Average indexed monthly earnings (AIME) is the wage-indexed, 35-year pay average behind your Social Security. See how indexing, zero years and the cap work.

A backdoor Roth IRA lets high earners fund a Roth IRA through a nondeductible IRA and a conversion. See the 2026 steps, Form 8606 and the pro-rata trap.

Barista FIRE means leaving your career once part-time pay and a smaller portfolio cover your costs. See the math, an example and 2026 health insurance rules.

A bear market is a fall of 20% or more in a broad stock index. Learn what causes one, how it differs from a correction or recession, and the recovery math.

A beneficiary designation names who inherits an IRA, 401(k) or life insurance policy and overrides your will. See the spouse, divorce and per stirpes rules.

A Boglehead invests the way Vanguard founder John Bogle taught: low-cost index funds, a simple mix and patience. See the principles, portfolios and pitfalls.

A bond ladder spreads money across bonds or CDs that mature in different years. Learn to build one, compare it with a bond fund, and see a worked example.

A bond is a loan to a government or company that pays you interest. Learn how coupons and yields work, why prices fall when rates rise, and the main types.

The retirement bucket strategy splits savings into cash, bonds and stocks by when you will spend them. Learn to size and refill each, and what tests found.

Budgeting means planning how you will spend and save income before the month begins. Learn the four steps, compare the main methods, and make a budget stick.

Bunching deductions packs two or more years of gifts into one tax year so you itemize, then take the standard deduction. See the 2026 math and an example.

The Canada Pension Plan (CPP) pays a lifelong pension built from your earnings. See the 2026 maximum, contribution rates and what starting at 60 or 70 does.

Capital gains are profits from selling investments, a home or other assets. See how gains net against losses, the 2026 tax rates, and ways to cut the bill.

A capital loss carryover moves capital losses you could not deduct into later tax years. See the $3,000 limit, the worksheet math, death rules and an example.

Cash flow is money in minus money out over a period. Learn the formula, why timing matters, cash flow vs. profit, and how it changes in retirement.

Catch-up contributions let savers 50 and older put extra into a 401(k), IRA or SIMPLE plan. See the 2026 amounts, the age 60–63 boost and the new Roth rule.

A certificate of deposit (CD) pays a fixed rate until a set maturity date. Learn how APY, early withdrawal penalties, brokered CDs, CD ladders and taxes work.

A Certified Financial Planner (CFP) meets four rules: education, exam, experience and ethics. See how long it takes, the fiduciary duty and how to verify one.

The Child Tax Credit is worth up to $2,200 per child under 17 in 2026. Learn who qualifies, how the $1,700 refundable part works and where it phases out.

Chubby FIRE is early retirement on about $80,000–$150,000 a year, or $2–3.75 million at 4%. Compare it with Lean and Fat FIRE and see how long it takes.

Coast FIRE means investing enough early that growth alone reaches your FI number by retirement. See the formula, a table by years and return, and the risks.

COBRA lets you keep your employer’s health plan after a job ends, at up to 102% of its cost. See who qualifies, how long it lasts, deadlines and alternatives.

Community property makes most income and assets from a marriage belong to both spouses equally. See the nine states, tax rules and double step-up at death.

CAGR is the steady yearly rate that turns a starting value into an ending value. Learn the formula, why it trails the average return and how funds report it.

Compound interest is interest earned on principal plus past interest. See the formula, how monthly deposits grow, what APY measures and how debt compounds.

The Consumer Price Index (CPI) tracks the prices US consumers pay. Learn how BLS calculates it, CPI-U vs. CPI-W vs. chained CPI, and how to read a report.

Consumption smoothing means keeping your living standard steady as income rises, falls and stops. Learn the theory, a lifetime example and its real limits.

Cost basis is what you paid for an asset, adjusted over time, and it sets your taxable gain. Learn to figure it, pick lots, and handle gifts and inheritances.

A cost-of-living adjustment (COLA) raises Social Security and some pensions with inflation. See how the 2.8% 2026 COLA was set and what Part B takes back.

A Coverdell ESA is an education account capped at $2,000 a year per child. Learn its income limits, age-18 and age-30 rules, and how it differs from a 529.

A credit score predicts how likely you are to repay debt. See what counts as a good score, the five FICO factors, how to raise yours and what changed in 2026.

A custodial account holds gifts for a child under UTMA or UGMA law. Learn the 2026 kiddie tax, when the child takes control and how it affects financial aid.

The debt avalanche pays your highest-rate debt first to cut total interest. See the steps, a worked example, 2026 rates and what it saves vs. the snowball.

The debt snowball pays your smallest balance first and rolls each freed payment into the next. See the steps, a worked example, its cost and a cheaper hybrid.

Debt-to-income ratio (DTI) divides monthly debt payments by gross monthly income. Learn the formula, what counts, what a good DTI is and 2026 mortgage limits.

Decumulation is the retirement phase of spending down savings. Learn the key decisions, 2026 rules, common strategies and how long a portfolio can last.

Deferred compensation is pay you earn now but receive, and pay income tax on, later. Learn how NQDC plans and 409A work, when FICA is due and the main risks.

A defined benefit plan pays a set retirement income from a formula. See the math with a worked example, the 2026 limits, vesting rules and cash balance plans.

A defined contribution plan is a workplace retirement account you and your employer fund. See examples, the 2026 limits, vesting, and DC vs. DB pros and cons.

Deflation is a sustained fall in the general price level. Learn what causes it, how it differs from disinflation, and what it does to debts and savings.

Delayed retirement credits raise your Social Security benefit 8% a year from full retirement age to 70. See how they are figured, paid and kept by a survivor.

DINK means dual income, no kids. See how two-earner couples without children save more, when marriage raises 2026 taxes and what unmarried partners give up.

Disability insurance replaces part of your pay if illness or injury stops you from working. Compare SSDI, group and individual policies and how each is taxed.

Diversification spreads money across and within asset classes so no one holding sinks you. See how correlation drives it, its limits and employer-stock risk.

A dividend is a share of company profits paid to shareholders. Learn the ex-dividend date rules, how to figure yield, why the price drops and how it’s taxed.

A dividend reinvestment plan (DRIP) turns dividends into more shares automatically. See why reinvested dividends are still taxed and how to track your basis.

Dollar-cost averaging means investing a fixed amount on a set schedule. See how it works, when a lump sum does better, a worked example and the tax-lot rules.

A donor-advised fund (DAF) lets you deduct a gift to charity now and recommend grants later. See the 2026 limits, grant rules, costs, pros and cons.

A down payment is the cash share of a home’s price paid at closing. See 2026 minimums by loan type, where the money can come from and how much to put down.

Dynamic spending lets retirement withdrawals rise after good markets and shrink after bad ones. Compare guardrails, floor-and-ceiling and other rules.

Early retirement means leaving work before Social Security and Medicare begin. See the key ages and penalties, how to size the bridge years and buyout rules.

The early withdrawal penalty is a 10% extra tax on 401(k) and IRA money taken before 59½. See how it’s figured, what it really costs and the main exceptions.

Earned income is pay for work: wages, tips and self-employment profit. See what counts vs. unearned income, why it pays FICA, and which 2026 rules require it.

Your effective tax rate is the share of income you pay in tax. Learn the formula, which Form 1040 lines to use and 2026 rates from $30,000 to $1 million.

An emergency fund is cash for job loss and surprise bills. Learn how many months to save, how to build it, where to keep it and 2026 retirement-plan options.

An employee stock purchase plan (ESPP) lets you buy company stock at up to a 15% discount. Learn the lookback, the $25,000 limit and how sales are taxed.

Employer contributions are money your employer adds to your retirement or health accounts. See the types, how much an employer can add in 2026 and the taxes.

Estate planning decides who inherits your assets and who acts for you if you can’t. See the core documents, a step-by-step checklist and the 2026 tax rules.

The federal estate tax is 40% of an estate above the $15 million exemption in 2026, or $30 million for couples. See how it’s figured and which states add one.

Estimated tax payments cover income with no withholding. Learn who must pay, the 2026 due dates, the safe harbor rules and how the underpayment penalty works.

An ETF is a fund whose shares trade on a stock exchange all day. Learn how creation and redemption work, what ETFs really cost and when they cut your taxes.

An expense ratio is a fund’s yearly operating cost as a share of its assets. Learn what it covers, what counts as a good one and what it costs over 30 years.

Expenses are the money you spend to live, from rent to groceries. See the types with examples, how to total yours, US monthly averages and what’s deductible.

F-you money is savings big enough to walk away from a bad job or deal. Learn to size it in months of runway, where to keep it and what quitting really costs.

Fat FIRE is early retirement on $150,000 a year or more, needing $3.75 million or more at 4%. See the 2026 tax thresholds it crosses and costly mistakes.

Your FI number, or FIRE number, is the portfolio that funds your spending for good. Learn the formula, costs people miss and how Social Security changes it.

FICA tax is the 7.65% Social Security and Medicare tax on wages. See 2026 rates, the $184,500 wage base, who is exempt and how to get excess tax back.

A fiduciary must act in your best interest. Learn the duties of loyalty and care, how they differ from Regulation Best Interest, and who counts as one.

Filing status sets your tax brackets, standard deduction and credits. Learn the five IRS statuses, how to tell which one fits, and the 2026 figures for each.

A financial advisor is a job title, not a license. Learn the main types, how each is regulated and paid, what advice costs and how to vet one before hiring.

Financial freedom means money no longer dictates your big choices. See its six stages, the three numbers that measure it, and how to reach the next stage.

Financial independence means investments and reliable income cover your spending with no paycheck. Learn the FI ratio test, what counts and how to reach it.

Financial planning coordinates cash flow, debt, taxes, investing, insurance, retirement and estate choices. Learn the 7 steps and when to hire help.

A financial projection estimates future income, taxes and balances year by year from stated assumptions. Learn to build one and why today’s dollars matter.

Financial wellness means covering today’s bills, absorbing shocks and reaching goals. Learn the CFPB’s four elements, how it’s scored and how to improve it.

FIRE means financial independence, retire early. See how your savings rate sets the timeline, the main FIRE types, and the gaps to bridge before 59½ and 65.

Fixed income covers bonds, CDs, Treasury bills and other investments that pay set interest. Compare the main types, their risks and their after-tax yields.

A flexible spending account (FSA) pays medical or child care bills with pre-tax pay. Learn the 2026 limits, carryover rules and how much to elect.

Franking credits pass Australian company tax on to shareholders. See how to calculate them, who gets a cash refund, the 45-day rule and what they’re worth.

Frugality means spending on what you value and cutting the rest, not buying the cheapest thing. See the FI math, frugal vs. cheap and where cuts pay most.

Full retirement age is when Social Security pays 100% of your benefit: 67 if born in 1960 or later. See the FRA chart and what claiming early costs.

Geoarbitrage means living somewhere cheaper on income or savings from a high-cost place. See the cost-of-living math, 2026 rules abroad and hidden costs.

The gift tax applies to large lifetime gifts, but in 2026 a $19,000 annual exclusion and $15 million exemption shelter most. Learn when to file Form 709.

A glide path is the schedule that moves a portfolio from stocks to bonds as a goal nears. Compare “to,” “through” and rising-equity paths and set your own.

Golden handcuffs are pay you forfeit if you quit, like unvested stock or deferred bonuses. Learn the common types, how to price leaving and when to stay.

Gross income is what you earn before taxes and deductions. Learn how to calculate it and how it differs on a paycheck, a tax return and a loan application.

Guyton-Klinger guardrails explained: adjusting retirement spending when the withdrawal rate drifts too high or too low against your portfolio.

Head of household is a filing status for unmarried people who keep up a home for a qualifying person. Learn the tests, who counts and the 2026 savings.

A health savings account (HSA) gives a triple tax break on medical costs. See the 2026 limits, who qualifies, how withdrawals are taxed and how to invest it.

HENRY means high earner, not rich yet: a big income with little saved. Test yourself with a net-worth benchmark and see the 2026 tax thresholds HENRYs cross.

A high-yield savings account pays far above the 0.38% national average. Learn how HYSAs work, how safe they are, how they are taxed and when a CD fits better.

Historical backtesting tests a retirement plan or investing strategy on real past returns. See how rolling periods work, how to read results and key biases.

Home equity is your home’s market value minus every debt it secures. Learn to calculate it with LTV, build it faster, and compare the ways to tap it.

A HELOC is a revolving credit line secured by your home. See how the draw period works, how far payments jump, and how it compares with a home equity loan.

The home sale exclusion shields up to $250,000 of gain on your main home, or $500,000 on a joint return. See the 2-of-5-year tests and early-sale rules.

House hacking means living in part of a property you own and renting out the rest. Learn 2026 FHA and VA options, how rent is taxed, and the risks.

An income replacement ratio compares retirement income with pre-retirement pay. Learn the formula, why 70%–80% is common, and what Social Security replaces.

Income tax is the tax on what you earn. Learn what income is taxed, how the 2026 federal tax is calculated step by step and how it differs from payroll tax.

An index fund is a mutual fund or ETF that copies a market index instead of picking stocks. See how it works, how to buy one and why its low costs matter.

An IRA is a tax-advantaged retirement account you open on your own. Compare IRA types and see the 2026 limit, who can contribute and when you can withdraw.

An ISA is a UK account where interest, dividends and gains are tax-free. See the £20,000 allowance for 2026/27, each ISA type and the 2027 cash ISA cut.

Inflation is a broad rise in prices that shrinks what each dollar buys. See what causes it, the 3.4% CPI reading for August 2026, and what is indexed to it.

Inheritance tax falls on each heir’s share at a rate set by their relationship to the deceased. See 2026 rates in the five states that levy it, and who pays.

An inherited IRA holds retirement money left to a beneficiary. Learn spouse and non-spouse options, withdrawal rules by heir type, and how the money is taxed.

An investment portfolio is everything you invest, across every account. See what goes in one, the main types, how to measure its return and what SIPC covers.

An IRA rollover moves 401(k) or IRA money into an IRA without tax. Learn direct vs. 60-day rollovers, the 20% withholding trap and the one-per-year rule.

IRMAA is the income-based surcharge on Medicare Part B and Part D premiums. See the 2026 brackets, the two-year lookback, the cliff effect and how to appeal.

An irrevocable trust trades control of assets for estate tax, creditor and Medicaid benefits. Compare ILITs, SLATs and GRATs, the tax costs and 2026 rules.

Itemized deductions are expenses you list on Schedule A instead of taking the standard deduction. See what counts in 2026, the limits and when itemizing wins.

Lean FIRE is early retirement on under about $40,000–$50,000 a year, or $1–1.25 million at 4%. See the math, 2026 tax and health rules, and the risks.

A liability is money you owe. Learn the main types of personal liabilities, how to value each one, the obligations people miss, and what insolvency means.

Life insurance pays an income-tax-free death benefit to the people who depend on you. Compare term vs. permanent, the tax rules and how to size coverage.

Lifestyle inflation, or lifestyle creep, is spending that rises with each raise. See what it costs your savings rate and FI number, and how to rein it in.

Liquid net worth is what you could turn into cash within days, minus debts. See whether a 401(k) or home equity counts, how taxes shrink it, and an example.

Long-term capital gains are profits on assets held over a year. See the 2026 0%, 15% and 20% brackets, how gains stack on income and how to use the 0% band.

Long-term care insurance pays for help with daily living that Medicare won’t cover. See when benefits start, the 2026 tax rules, hybrids and who it suits.

Longevity risk is the chance you outlive your savings. See the odds of reaching 90 or 95, what a longer plan costs, and the main ways to hedge it.

A marginal tax rate is the tax on your next dollar of income. Find yours for 2026, see why it can top your bracket and how it prices a Roth conversion.

Married filing jointly puts a couple’s income on one return. See who qualifies, the 2026 joint brackets, the marriage bonus and penalty, and joint liability.

Married filing separately means each spouse files their own return. Learn the 2026 limits, the credits you lose, and when separate returns still pay off.

Medicare is federal health insurance for people 65 and older and some under 65. See who qualifies, what Parts A–D cover, 2026 costs and what isn’t covered.

Medicare Advantage (Part C) delivers Medicare through a private plan. See what it costs in 2026, its pros and cons vs. Medigap and when you can switch.

Medicare enrollment periods set when you can sign up or switch plans. See the 7-month IEP, the 8-month SEP after job coverage, the GEP and Medigap timing.

Medicare Part B covers doctors and outpatient care. See the 2026 premium and deductible, IRMAA income tiers, when you can delay it and how the penalty works.

Medicare Part D is optional drug coverage from private plans. Learn how drug lists work, the 2026 $615 deductible and $2,100 cap, and the late penalty.

Medicare tax is 1.45% of all wages with no cap, plus a 0.9% surtax on high earners. See who owes it, why couples can owe more at filing and what it pays for.

Medigap (Medicare Supplement Insurance) pays costs Original Medicare leaves to you. Compare Plan G, Plan N and the other letters, pricing and when to buy.

A mega backdoor Roth converts after-tax 401(k) money to Roth. Learn how the $72,000 limit for 2026 sets your room, what your plan needs and the testing catch.

A mini-retirement is a self-funded career break of months or a year. See its true long-run cost, health insurance options, tax moves and how to plan one.

Modified adjusted gross income (MAGI) is AGI with rule-specific add-backs. See how MAGI works for Roth IRAs, Medicare IRMAA, ACA credits and NIIT in 2026.

A money market fund is a mutual fund that aims for a steady $1 share price. Learn how it differs from a money market account, its risks and how it’s taxed.

A Monte Carlo simulation runs a financial plan through thousands of random market paths. See how it works, what a success rate really means, and its limits.

A mortgage is a loan secured by your home. Learn how payments, rates and loan types work, the 2026 limits, and what a 15- vs. 30-year term really costs.

Mullet FIRE splits early retirement in two: lean spending and some work first, a fuller lifestyle later. See when to step up, with an example and trade-offs.

Municipal bonds are state and local debt whose interest is usually free of federal tax. See the tax rules, when munis beat taxable bonds, and the risks.

A mutual fund pools investors’ money in one managed portfolio priced once a day. Learn how NAV pricing, share classes, loads and taxable distributions work.

Net income is the pay you keep after taxes and deductions. See the take-home pay formula, a 2026 paycheck example, and how net income differs from gross.

The net investment income tax (NIIT) is a 3.8% surtax on investment income once MAGI tops $200,000 or $250,000. See what counts, an example and how to cut it.

Net unrealized appreciation (NUA) lets employer stock leave a 401(k) with its growth taxed as capital gains. See the rules, the steps and NUA vs. a rollover.

Net worth is what you own minus what you owe. See how to calculate it, what raises it and what doesn’t, and the Fed’s median net worth by age.

A nominal interest rate is the stated rate before inflation, compounding and fees. Learn how it differs from the real rate, APY and APR, and what sets it.

Non-taxable income is money the law excludes from federal income tax. See common examples, what must still be reported, and how it can still raise your taxes.

Old Age Security (OAS) is Canada’s residence-based pension from 65. See who qualifies, the 2026 amounts, deferral to 70 and how the 15% clawback works.

The One Big Beautiful Bill Act made the 2017 tax cuts permanent and added tips, overtime and senior deductions. See what changes in 2026 and what expires.

Opportunity cost is the value of the best option you give up. Learn how to calculate it and weigh it in saving, debt, housing and retirement decisions.

Passive income is money that arrives with little ongoing work. See real examples, the IRS passive activity rules, 2026 taxes and how big a portfolio you need.

Pay yourself first means saving part of each paycheck before you spend. See how to automate it, where the money goes, 2026 limits and auto-enrollment rules.

A pension is retirement income an employer promises, usually monthly for life. Learn how it works, your payout options, how it is taxed and what PBGC insures.

Pension lump sum vs. annuity: learn how a lump-sum offer is calculated, how to compare it with lifetime checks, the tax and rollover rules, and pitfalls.

The portfolio percentage spending rule: base each retirement year’s spending on a fixed share of the portfolio so the budget moves with your balances.

A power of attorney lets someone you choose act for you on money or medical matters. Learn the types, how to set one up, an agent’s limits and when it ends.

A pre-tax contribution cuts this year’s taxable income and is taxed on withdrawal. See what it saves in 2026, why FICA still applies, and pre-tax vs. Roth.

The premium tax credit lowers ACA Marketplace premiums. See the 2026 income chart, how the credit is calculated, the 400% cliff and full repayment rules.

The primary insurance amount (PIA) is your Social Security benefit at full retirement age. See the 2026 bend points, a worked example and what builds on it.

Private mortgage insurance (PMI) protects the lender when you put under 20% down. Learn how it’s paid, when you can drop it at 80% or 78%, and 2026 tax rules.

The pro-rata rule decides how much of an IRA conversion or withdrawal is taxable when you hold after-tax basis. See the Form 8606 math and the year-end trap.

Probate is the court process that proves a will, pays debts and transfers property. Learn the steps, what it costs, how long it takes and how to avoid it.

Property tax is the yearly local tax on real estate, based on assessed value and local rates. See how bills are figured, escrowed, appealed and deducted.

Provisional income decides how much of your Social Security is taxable. See the formula, what counts, the $25,000 and $32,000 thresholds and an example.

Purchasing power is how much a dollar buys. See how inflation erodes it, how to convert dollars between years with the CPI, and why fixed incomes lose ground.

A qualified charitable distribution (QCD) sends up to $111,000 from an IRA to charity tax-free in 2026 and counts toward your RMD. See when it beats a check.

Qualified dividends are taxed at 0%, 15% or 20% instead of ordinary rates. See the 2026 thresholds, the 60-day holding test and which payouts don’t qualify.

A QLAC is a deferred income annuity bought with IRA or 401(k) money and left out of RMDs until it pays. See the $210,000 limit for 2026, rules and trade-offs.

A REIT owns or finances income-producing real estate and must pay out most of its income. Learn the types, how REIT dividends are taxed and REITs vs. rentals.

The real rate of return is what an investment earns after inflation. See the exact formula, why taxes can turn it negative, and how to use it in a plan.

Rebalancing brings a drifting portfolio back to its target mix. Compare calendar and threshold rules, ways to rebalance without selling and 2026 tax rules.

Refinancing replaces a loan with a new one. See the break-even math, why a new 30-year term can erase the savings, the 2026 rules and how the IRS treats it.

A RRIF pays out RRSP savings as retirement income. See the minimum withdrawal factors by age, when you must convert, how RRIF income is taxed, and an example.

An RRSP is Canada’s tax-deferred retirement account. See the 2026 limit of $33,810, how your deduction room is set, the deadline, and the age-71 rule.

Rent vs. buy weighs the full cost of renting against owning a home. Learn the unrecoverable-cost method, the break-even horizon, the 5% rule and tax effects.

Rental property depreciation deducts a building’s cost, but not the land, over 27.5 years. Learn to calculate it and how recapture is taxed when you sell.

A required minimum distribution (RMD) is the yearly withdrawal the IRS requires from IRAs and 401(k)s. See 2026 ages, the RMD table, deadlines and penalties.

Restricted stock units (RSUs) are shares your employer promises once you vest. Learn how RSUs are taxed in 2026, why withholding falls short and when to sell.

Retirement accounts like 401(k)s and IRAs trade a tax break for limits and withdrawal rules. Compare the main types, 2026 limits and workplace plan vs. IRA.

Retirement contribution limits cap yearly saving in 401(k)s, IRAs and HSAs. See the 2026 limits, how they stack across jobs, and how to fix an excess.

Retirement income is what you live on after work: Social Security, pensions, annuities and withdrawals. Learn each source, the income floor and 2026 taxes.

Retirement planning turns a target retirement age into a savings, income and tax plan. Learn the steps, how much you need, key ages and common mistakes.

The retirement spending smile: real spending falls about 1% a year in retirement, fastest in the late 70s. See the research, BLS data by age and how to plan.

A reverse mortgage lets homeowners 62 and older borrow against equity with no monthly payment. See 2026 HECM limits, costs, payout options and what heirs owe.

A revocable living trust manages your assets while you live and passes them without probate. Learn how to fund it, how it compares with a will and its limits.

Risk tolerance is how much investment loss you are willing and able to accept. Learn its three parts, how it is measured and how to stress-test a mix.

A robo-advisor is an automated service that builds and manages an ETF portfolio. See how it works, its all-in cost, the tax-harvesting catch and its limits.

The Roth 5-year rules are separate clocks for Roth IRA earnings, each conversion and each Roth 401(k). See when each starts, what it controls and an example.

A Roth 401(k) is a workplace Roth account: pay is taxed now and qualified withdrawals are tax-free. See 2026 limits, the 5-year rule and Roth vs. traditional.

A Roth conversion moves pre-tax retirement money into a Roth account. See how it’s taxed in 2026, what it does to IRMAA and Social Security, and when it pays.

A Roth conversion ladder turns pre-tax savings into money you can spend before 59½. See the five-year rule, the 2026 tax math, a sample timeline and pitfalls.

A Roth IRA takes after-tax money and pays out tax-free in retirement. See the 2026 income limits, the reduced-contribution math and the withdrawal order.

The rule of 25 says to save 25 times your yearly spending before you retire. See where the 25 comes from, what it assumes, and when to aim for 28–33 times.

The rule of 55 waives the 10% penalty on 401(k) and 403(b) withdrawals if you leave a job in or after the year you turn 55. See who qualifies and the traps.

The Rule of 72 estimates how long money takes to double: divide 72 by the yearly rate. See how accurate it is and how to use it on inflation, fees and debt.

The S&P 500 tracks about 500 large US companies weighted by market value. Learn how members are chosen, why it is concentrated and what its returns include.

A sabbatical is extended leave from a job you return to. Learn how paid and unpaid sabbaticals affect pay, taxes, health insurance, your 401(k) and vesting.

A safe withdrawal rate is the highest starting withdrawal that would have lasted a retirement. Compare the studies, what moves it and early-retiree rates.

The SALT deduction lets itemizers deduct state and local income, sales and property taxes. See the 2026 $40,400 cap, the income phase-down and planning moves.

A Sankey diagram sizes each band to the amount it carries. See how a cash flow Sankey traces a 2026 paycheck into taxes, saving and spending.

The Saver’s Credit is worth up to $1,000 ($2,000 joint) for retirement saving on a modest income. See 2026 income limits, rates and the 2027 Saver’s Match.

Your savings rate is the share of income you save instead of spending. Learn three ways to calculate it, what a good rate is, and how it sets your FI date.

Scenario planning tests a financial plan against a few coherent futures, from a deep bear market to tax law changes. See how it differs from Monte Carlo.

SECURE 2.0 raised the RMD age to 73 and 75, added a larger catch-up at 60–63, Roth catch-ups and 529-to-Roth rollovers. See when each change starts.

The SECURE Act of 2019 raised the RMD age, allowed IRA contributions after 70½ and ended the stretch IRA for most heirs. See each rule and its 2026 status.

Self-employment tax is the 15.3% Social Security and Medicare tax on business profit. Learn how to figure it for 2026, the half deduction and what lowers it.

A SIPP is a UK personal pension where you choose the investments. See how tax relief works, the 2026/27 limits, when you can draw it and SIPP vs. ISA.

Semi-retirement is part-time work before full retirement. See how much you need, how phased retirement works, and 2026 Social Security and Medicare rules.

The senior deduction gives each person 65 or older up to $6,000 more for 2025–2028. See who qualifies, how the phase-out works and what it won’t do.

A SEP IRA lets any employer, even a one-person business, put up to 25% of pay into IRAs, capped at $72,000 for 2026. See the 20% owner math and staff rules.

Sequence of returns risk is the danger that losses early in retirement drain savings for good. See a worked example, why order matters, and how to reduce it.

I bonds are Treasury savings bonds paying a fixed rate plus inflation. See the 4.26% rate for May–October 2026, the $10,000 limit, the lockup and taxes.

Short-term capital gains come from assets held a year or less and are taxed as ordinary income. See 2026 rates, the cost of selling early, and ways to cut it.

A side hustle is paid work outside your main job. Learn how side income is taxed in 2026, how much to set aside, the 1099 rules and how it can speed up FIRE.

A SIMPLE IRA is a payroll-savings IRA plan for employers with 100 or fewer workers. See the 2026 limits, the required employer match and the 25% 2-year rule.

A single premium immediate annuity (SPIA) turns a lump sum into guaranteed income within a year. See what sets the payout, the tax rules and alternatives.

A sinking fund saves a set amount each month for a known bill, such as car insurance or holidays. Get the formula, a four-fund example and the bond meaning.

Slow FI, or Slow FIRE, means using progress toward financial independence to improve life now. See what slowing down costs and how it differs from Coast FIRE.

Social Security pays retirement, disability and survivor benefits. Learn who qualifies, how benefits are figured, when to claim and whether it will run out.

The Social Security break-even age is when claiming later pays off in total benefits. See the formula, ages for 62, 67 and 70, and the odds you reach them.

The Social Security earnings test holds back benefits if you claim early and keep working. See the 2026 limits, what counts and how you get it back.

Social Security spousal benefits pay up to 50% of your spouse’s full-retirement-age benefit. See who qualifies, the early-claiming cuts and ex-spouse rules.

Social Security survivor benefits pay a widow, widower, child or parent after a worker dies. See who qualifies, the 71.5%–100% amounts and when to switch.

The Social Security tax torpedo can turn a 12% bracket into a 22.2% marginal rate. See how it works, a 2026 example and ways retirees avoid or shrink it.

A Solo 401(k) lets a self-employed owner contribute as employee and employer. See 2026 limits, the 20% formula, a worked example and a SEP IRA comparison.

The Kitces spending ratchet explained: give retirement spending a raise after strong inflation-adjusted portfolio growth, without cutting it back later.

A spousal IRA lets a couple filing jointly fund an IRA for a spouse with little or no pay. See who qualifies, the 2026 household limits and deduction rules.

The standard deduction is the flat amount you subtract instead of itemizing: $16,100 single, $32,200 joint for 2026. See the age-65 add-on and who gets less.

State income tax is charged by most US states on top of federal tax. Learn how residency works, which nine states skip it and what a move saves you in 2026.

Stealth wealth means living well below what your net worth allows so few people know what you have. Learn why people choose it, how it works and its risks.

A step-up in basis resets an inherited asset’s basis to its value at death, so lifetime gains go untaxed. See what qualifies, the exceptions and an example.

Employee stock options let you buy company shares at a fixed price. Learn how ISOs and NSOs are taxed, when the AMT applies, and what happens if you leave.

Stocks are shares of ownership in a company. Learn how they make money, the main types, how to buy them, the risks and how they’re taxed in 2026.

Superannuation is Australia’s compulsory retirement savings system. Learn the 12% guarantee, 2026–27 caps, access age, tax and how it compares with a 401(k).

A target-date fund shifts from stocks toward bonds as its target year nears. See how it works, why 401(k)s default to it, its tax catch and how to pick one.

Tax brackets set the rate on each slice of your taxable income. See the 2026 federal brackets by filing status, how they work and how they change each year.

Tax credits cut your tax bill dollar for dollar. Learn how they differ from deductions, refundable vs. nonrefundable credits and the main 2026 credits.

The 2017 Tax Cuts and Jobs Act (TCJA) cut rates, nearly doubled the standard deduction and capped SALT. See its changes and why the 2025 sunset never came.

Tax diversification spreads savings across taxable, pre-tax and Roth accounts. See why the mix cuts retirement taxes, a 2026 example and how to build it.

Tax drag is the return you lose each year to tax on interest, dividends and fund payouts. See how to calculate it, a 20-year bond example and ways to cut it.

Tax gross-up explained: why a taxable withdrawal must cover both the spending and the tax it creates, and how the extra amount is calculated.

Tax withholding is income tax taken from your pay or benefits in advance. See how the 2026 W-4 sets it, default rates on bonuses and IRAs, and refunds.

Tax-advantaged accounts such as 401(k)s, IRAs, HSAs and 529s cut tax on saving for retirement, health or education. Compare how each is taxed and 2026 limits.

A tax-deferred account postpones tax on contributions and growth until you withdraw. See which accounts qualify, when deferral beats a Roth, and the catches.

A tax-efficient withdrawal strategy sets which retirement account pays each year to cut lifetime tax. Compare withdrawal orders and see a 2026 example.

A TFSA lets Canadians invest and withdraw tax-free. See the $7,000 limit for 2026, how room builds to $109,000, the re-deposit trap, and TFSA vs. RRSP.

Tax-gain harvesting sells and rebuys appreciated investments in low-income years, often at a 0% federal rate. See how much fits in 2026 and the hidden costs.

Tax-loss harvesting sells investments at a loss to offset gains and up to $3,000 of income. See the steps, the 2026 rules and what a loss really saves.

A taxable brokerage account has no contribution limits or withdrawal rules. Learn how its dividends and gains are taxed in 2026 and when to use one.

Taxable income is the amount federal tax rates apply to: AGI minus your deductions. Learn how to calculate it, how it is taxed in 2026 and how to lower it.

Taxable net worth estimates what would be left after tax if every account and property were sold or withdrawn this year. How the estimate is built and read.

A three-fund portfolio holds US stocks, international stocks and bonds in three index funds. See sample mixes, how to rebalance and where each fund belongs.

The Thrift Savings Plan (TSP) is the 401(k)-style plan for federal staff and the military. See 2026 limits, up to 5% in agency money, fees and withdrawals.

The time value of money is why a dollar today is worth more than one later. Learn present and future value, net present value, discount rates and examples.

Total compensation is salary plus bonuses, equity, retirement money and benefits. See what to count, how each piece is taxed and how to compare job offers.

Total return is an investment’s price change plus its dividends, interest and distributions. Learn the formula, how it differs from yield and how it is taxed.

A traditional IRA trades a possible tax deduction now for taxed withdrawals later. See who can deduct in 2026, the phase-out math with an example, and RMDs.

Transfer on death (TOD) passes brokerage accounts and, in many states, a home to a named heir without probate. See how TOD and POD work, taxes and pitfalls.

Travel hacking uses card bonuses, points and miles to pay for trips. Learn how to value points, what it does to your credit score and when rewards are taxed.

Treasury bonds are 20- and 30-year U.S. government bonds that pay fixed interest every six months. Learn how to buy them, 2026 yields, taxes and price risk.

TIPS are Treasury bonds whose principal rises with inflation. Learn the index ratio, 2026 real yields vs. breakeven, phantom-income tax and TIPS ladders.

The Trinity study tested withdrawal rates of 3%–12% against US markets from 1926 to 1995. See its success-rate table, what the authors advised and its limits.

A trust is a legal arrangement in which a trustee holds assets for beneficiaries. Learn the roles, the main types, 2026 trust tax rates and how to set one up.

A trust fund is money or property a trustee manages for a beneficiary. Learn how payouts work, how distributions are taxed in 2026 and the alternatives.

The UK State Pension pays £241.30 a week in 2026/27 with 35 qualifying years. See how it’s worked out, State Pension age by birth date, deferral and tax.

Variable percentage withdrawal (VPW) explained: withdrawals set by portfolio balance and remaining horizon, with the rate rising as the horizon shortens.

A vesting schedule sets when employer money or stock becomes yours. Compare cliff and graded vesting, 401(k) and pension limits, and how stock awards vest.

Volatility is how widely an investment’s returns swing. Learn how standard deviation, beta and the VIX measure it, why swings cut growth, and how to plan.

The wash sale rule disallows a loss if you buy a substantially identical security 30 days before or after the sale. See what counts, IRA traps and fixes.

The wealth accumulation phase is the working stretch when you build assets. Learn its stages, what drives growth, the 2026 limits and common mistakes.

Wealth preservation protects what you have built from market losses, inflation, taxes and lawsuits. Compare it with capital preservation and see 2026 tools.

A wealth tax is a yearly tax on net worth above a threshold. Learn how it works, which countries levy one in 2026, why the US has none, and its pros and cons.

The widow’s penalty is the tax jump a surviving spouse faces when joint filing ends. See when it starts, 2026 thresholds, an example and how to plan for it.

A will names your heirs, your executor and a guardian for your children, yet most accounts pass outside it. Learn what it controls and how to make one valid.

A withdrawal rate is the share of your portfolio you spend each year. Learn the formula, what to count, why the rate drifts, and the minimum rates by age.

Work optional means your savings could cover your costs, so a job becomes a choice. See the no-paycheck test, what extra working years add, and 2026 rules.

A zero-based budget gives every dollar of income a job until nothing is unassigned. See the steps, an example, and how it compares with incremental budgeting.