Rollover – A tax-free and penalty-free transfer of money from one retirement plan to an IRA.
Risk Tolerance – The capacity to accept investment risk. This includes psychological factors relating to your willingness to “stomach” fluctuations of an investment.
Diversification – Owning many different types of investments in order to reduce risk. (Not having all of your eggs in one basket.)
Dollar Cost Averaging – A systematic way of investing a set amount of money monthly or quarterly. With this strategy, an investor tries to reduce the risk of investing a large sum of cash all at once.
Net Worth – The difference between the total value of what you own minus what you owe.
Compound Interest – Interest that is computed on the principal (balance) and on the interest accrued during the preceding period. Compound interest may be computed daily, monthly, quarterly, semi- annually, or annually.
Tax Deferred – Tax treatment of some products and investments that result in income taxation only upon maturity or withdrawal of funds.
Vesting – Refers to the right to receive workplace retirement benefits. An employee often is not entitled to pension or employer contributions to a 401(k) plan until he or she has been at a company for a certain period of time. Most employees are 100% vested after 5 years of plan enrollment.
Email me your financial questions.