Plain-English definitions for the terms you'll encounter on your financial journey.
An annual marketing or distribution fee on a mutual fund used to pay for promotion and broker commissions.
A general guideline suggesting that retirees can withdraw four percent of their initial portfolio balance annually, adjusted for inflation, without running out of money.
Annual Percentage Rate represents the total yearly cost of borrowing money, including interest and fees, giving you a clearer picture of what a loan like a car payment will actually cost you over time.
Annual Percentage Yield is the amount of interest you earn on a savings account over a year, taking into account the effect of your interest earning more interest as it sits in the bank.
The ability to use net capital losses that exceed the annual limit to reduce taxable income in future years.
A tax imposed by the government on the annual net profits of a corporation.
The annual interest rate paid by the issuer of a bond to the bondholder.
A technique that allows gifts to a trust to qualify for the annual gift tax exclusion by giving beneficiaries a limited time to withdraw funds.
An investment's annual income divided by the current price of the security.
The portion of the government budget that is decided upon by Congress through annual appropriations bills.
The annual percentage rate of growth that a particular stock's dividend experiences over a period of time.
An amount of money put into a retirement account that exceeds the annual legal limit set by the IRS.
The annual fee that all funds or ETFs charge their shareholders, expressed as a percentage of assets.
The standard federal income tax form used by individual taxpayers to report their annual income and calculate their taxes.
Annual Gift Tax Exclusion — The specific amount of money or value one person can give to another in a single year without having to report it to the IRS.
An order to buy or sell a security that remains active until it is executed or manually canceled by the investor.
The total annual rental income of a property divided by the property's purchase price and expressed as a percentage.
A strategy that aims to capitalize on the continuance of existing trends in the market.
The total amount of money that a country's government has borrowed from various sources. It represents the accumulation of annual budget deficits over time.
Net Unrealized Appreciation is a tax break that allows you to pay lower tax rates on company stock you take out of your 401(k) when you retire. It turns the growth on that stock into a lower-taxed investment gain rather than regular income.
A specific annual period during which individuals can sign up for health insurance or make changes to their existing coverage.
A type of retirement plan that gives employees a share in the company's profits, with contributions decided annually by the employer.
A quick formula used to estimate how many years it will take for an investment to double at a fixed annual rate of interest.
The strategy of selling investments that have experienced a decline in value to offset realized capital gains from other investments. Any remaining net losses can also be used, up to an annual limit, to offset regular income taxes.
An annual document provided by employers that shows the total wages earned and the amount of taxes withheld for a year.