Terms and Acronyms

(This is a work in progress. We are adding to it and cleaning it up as we go. Please feel free to make suggestions!)

Agencies

SSA == Social Security Administration

CBO == Congressional Budget Office

BLS == Bureau of Labor Statistics

IRS == Internal Revenue Service

DOL == Department of Labor (regulates a lot of retirement plans)

CMS == Centers for Medicare and Medicaid

OPM == US Office of Personnel Management (oversees FERS, TSP, etc — the Federal Government is the biggest employer in the country – by far – with approximately 3 million employees — nearly twice as many employees as the number 2 employer (Wal-Mart)!)

SEC == Securities and Exchange Commission (regulates many financial products)

CFPB == Consumer Financial Protection Bureau (created as part of Dodd-Frank Act, started operation in 2011)

HUD == US Department of Housing and Urban Development

FHA == Federal Housing Administration (part of HUD, provides mortgage insurance for certain residential mortgages and sets standards for them)

GNMA == Government National Mortgage Association (Ginnie Mae) (may also refer to GNMA-backed mortgage loans)

Laws and Amendments

ERISA == the Employee Retirement Income Security Act of 1974 (a federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry — notably, this governs 401k plans — and later amendments to it included COBRA and HIPAA)

COBRA == Consolidated Omnibus Budget Reconciliation Act (covers many many things, but the one mostly referenced to in retirement planning conversions is the right to extend coverage under a former employer’s healthcare plan after loss of a job)

HIPAA == Health Insurance Portability and Accountability Act (provides protections against discrimination in health coverage based on pre-existing health issues, but is mainly referenced regarding privacy and control over sharing one’s healthcare data)

ARPA == American Rescue Plan Act (March 11, 2021 — notably, this eliminated, temporarily, the income limit for ACA income-based subsidies for health insurance)

IRA(2022) == Inflation Reduction Act (because it’s not at all likely to be confused with IRA (Individual Retirement Arrangement)

CARES == Coronavirus Aid, Relief, and Economic Security Act (March, 2020 law which provided a vast array of financial and other relief measures during the pandemic — including waiving RMDs for 2020, Paycheck Protection Program (PPP) loans, massive expansion of Economic Injury Disaster Loans (EIDL), expansion of unemployment benefits, etc)

TCJA (2017) == Tax Cuts and Jobs Act (cut tax rates for individuals and corporations, expanded the standard deduction, etc. Many provisions, particularly tax cuts for individuals, expire at the end of 2025. Sometimes called the “Trump Tax Cuts”)

EGTRRA (2001) == Economic Growth and Tax Relief Reconciliation Act of 2011 (created a new 10% bracket, lowered various other individual tax rates, increased child tax credit, dependent care credit, etc – sometimes called the “Bush Tax Cuts”)

ATRA (2012) = American Taxpayer Relief Act of 2012 (extended most of the Bush tax cuts for individuals with < $400k income but let the top rates go back up, reinstated phaseouts of certain deductions and exemptions and credits, reset the estate tax and, for the first time, indexed the estate tax exemption to inflation, indexed the AMT to inflation, too)

FCRA == Fair Credit Reporting Act

Social Security (SS)

FRA == Full Retirement Age (somewhere between 65 and 67, depending on when you were born)

WEP == Windfall Elimination Provision (a correction to account for getting a pension from a job not covered by SS)

GPO == Government Pension Offset (a similar correction, but to spousal benefits, for someone who gets a pension from non-covered employment)

RET == Retirement Earnings Test (a temporary reduction in benefits if you collect SS before FRA and earn “too much” other income)

PIA == Primary Insurance Amount (your full retirement benefits at FRA)

SSI == Supplemental Security Income (a Federal income supplement funded by general tax revenues, not SS, to help aged, blind, and disabled people who have little or no income; may be combined with state SSI programs)

SSDI == Social Security Disability Insurance (benefits for disabled or blind persons who are “insured” by workers contributions to SS, based on your earnings, and may provide benefits for your dependents, too)

AIME (or AME) == Average Indexed Monthly Earnings (used in calculating your eventual monthly SS benefit – historical earnings are adjusted for national average changes in wages over time)

COLA == Cost Of Living Adjustment (SSI and SS benefits are increased annually based on changes in the CPI-W. (For more about how the COLA works, please read this: What is the Social Security COLA (Cost Of Living Adjustment) and How Is It Computed? )

CPI-W == Consumer Price Index for Urban Wage Earners and Clerical Workers  (as distinct from other CPI formulations such as CPI-U and CPI-E)

AWI (or NAWI) == (National) Average Wage Index (representative of average per-worker wage growth over time)

Spousal Benefit == an additional cash benefit one may collect based on the earnings of a spouse or ex-spouse.  It does *not* reduce or affect what the spouse collects, but it may be reduced by your *own* benefits

Survivor Benefit == cash benefit which is a continuation of the benefits that a higher-earning spouse or ex-spouse had been collecting prior to their death

Retirement Accounts

IRA == Individual Retirement *Arrangement* — may include IRA Accounts (often just referred to, incorrectly as IRAs), and IRA *Annuities* — and refers to the whole *collection* of IRA accounts.   (“IRA Accounts” is not redundant the way “ATM Machine” is — because the A in IRA does not stand for “Account”)

tIRA == Traditional IRA (an IRA, or IRA account, usually funded with pre-tax (deductible) contributions, and whose growth and eventual distributions may be taxable later)

rIRA == Roth IRA (an IRA or IRA account funded with non-deductible, after-tax contributions — and growth are eventual distributions are usually tax-free)

401k, 403b, 457 == various employer-based retirement plans which include traditional and may include Roth components

TSP == Thrift Savings Plan (the approximately equivalent to a 401k, but for employees of the federal government – has ultra-low-cost index investments)

FERS == Federal Employee Retirement System (started on 1/1/1987 to eventually replace older federal employee programs — since then, federal employees *do* participate in Social Security, but they also may accrue pension benefits — and the TSP was created as part of this)

RMD == Required Minimum Distribution (most retirement accounts, notably except for Roth IRAs, have Required Minimum Distributions annually once one reaches a specific age, may be more complicated regarding inherited accounts)

DB == Defined Benefit (plan) (typically the more traditional pension — the amount you get paid is formulaic, your contributions, if any, don’t define it)

DC == Defined Contribution (plan) (retirement plan where the benefits aren’t formulaic, but rather accumulate based on what you and/or your employer contribute) — this is where most 401k, 403b, 457b, and TSP plans fall.

SPD == Summary Plan Description (document describing specific features of a given retirement plan — *must* be given to participants)

ADP and ACP and HCE == Actual Deferral Percentage, Actual Contribution Percentage, Highly Compensated Employee (used in testing 401k and other plans to make sure they don’t just favor the highest income participants)

Solo 401k (or Individual 401k, or even sometimes single-participant 401k) == a specialized version of the employer-based 401k, but without most of the administrative overhead, available only for the self-employed, or those whose only employee is a spouse.

SECURE (Act) == Setting Every Community Up For Retirement Errors (er, no, sorry, it’s supposed to be “Enhancement” but it’s really made a freaking dumpster fire of a mess for inherited IRAs)

Form 5500 == annual report which must be filed by most qualified retirement plans

QDRO == Qualified Domestic Relations Order (used for splitting retirement plans, typically as part of a divorce)

SEP == Simplified Employee Pension (usually used as part of “SEP-IRA” — but the SEP-IRA is the *account* associated with a SEP, into which the contributions go) — commonly used by a self-employed person to save substantial amounts for retirement in addition to (or instead of) just ordinary IRA contributions)

TSA == Tax-Sheltered Annuity (another name for a 403(b) plan)

Keogh == a tax-deferred pension plan for self-employed individuals (may be defined contribution or defined benefit)

SIMPLE (SIMPLE IRA or SIMPLE 401k) == Savings Incentive Match Plan for Employees (a simplified employer-based retirement savings plan for smaller employers)

QCD == Qualified Charitable Distribution (a distribution directly from an IRA to a charity which happens on a non-taxed basis but which satisfies RMDs)

DB, EDB == Designated Beneficiary, Eligible Designated Beneficiary (and the corresponding non-designated beneficiary, and non-eligible designated beneficiary) (categories regarding RMD rules for inherited IRA distributions)

Medicare and Healthcare

Traditional Medicare (parts A, B, D) — A is hospitalization, B is outpatient, and D is pharmacy benefits

MediGap == Medicare Supplement == supplemental insurance which fills in some gaps in Traditional Medicare (deductibles, out of pocket max, etc)

Medicare Advantage (part C) == a private substitute for parts A and B (and sometimes D) – often costs less, but may require staying in-network

IRMAA == Income Related Monthly Adjustment Amount == a monthly supplemental cost above the basic monthly cost for Medicare, based on your income from two years prior

ACA (“ObamaCare”) == Affordable Care Act

Advanced Premium Credits == “ObamaCare Subsidies” (the structure through which ACA offsets the actual premiums for one’s health insurance via a tax credit, based on one’s income

CSR == Cost Sharing Reduction subsidy (another benefit from ACA/ObamaCare which helps with other out-of-pocket costs in addition to any insurance premium subsidies one may be receiving)

FPL == Federal Poverty Level (used in computing ACA subsidies)

Annuities and Life Insurance

SPIA == Single Premium Immediate Annuity (pay a fixed amount of money and immediately start a monthly stream of payments)

DIA == Deferred Income Annuity

MYGA == Multi-Year Guaranteed Annuity (a type of fixed annuity  which offers a fixed interest rate for a fixed, limited time, typically 3-10 years)

VA == Variable Annuity

FIA == Fixed Index Annuity

RILA == Registered Index-Linked Annuity (a deferred annuity which accrues value based on a formula linked to a market index, usually with a cap and floor)

WL == Whole Life (a form of permanent life insurance which provides both a death benefit and accrues value over time)

UL == Universal Life

VUL == Variable Universal Life

COI == Cost Of Insurance (the component of expenses for a life insurance product which actually pays for the insurance component to make up the difference between the cash value and the death benefit)

QLAC == Qualified Longevity Annuity Contract (deferred fixed annuity which qualifies to be exempt from RMDs)

IUL == Indexed Universal Life

[the whole “bank on yourself” and “TFRA” and “infinite banking” mishmash of marketing terms used for selling permanent life insurance — add here?]

1035 == US Code section 1035 (pertains to tax-free transfer of funds from one annuity or life insurance contract to another)

Employer Stock 

ESOP == Employee Stock Ownership Plan

RSU == Restricted Stock Units

ISO == Incentive Stock Option

NQSO == Non-Qualified Stock Option

Taxes

AGI == Adjusted Gross Income

MAGI == Modified Adjusted Gross Income (there are about 10 versions of this, computed differently, depending on what one is using MAGI *for*) Here is a terrific summary of various types of MAGI and what’s included in their computation, courtesy of Andy Panko at Tenon Financial: www.tenonfinancial.com/magi-summary

LTCG == Long Term Capital Gains (versus STCG, short-term capital gains)

W2 == annual wage reporting provided by an employer

1099 == any of several forms used to report money or income (may just be imputed income, not cash) received (variations include 1099-R, 1099-INT, 1099-DIV, 1099-B, 1099-MISC, et. al. — for, respectively, retirement account distributions, interest earned, dividends/distributions received, proceeds of sales of assets, and miscellaneous income, and there are others, too)

1098 == used to report interest paid

Schedule A == itemized deductions on one’s taxes

Schedule C == self-employment/sole proprietorship income

Schedule D == reporting of capital gains

Schedule SE == reporting and computing self-employment taxes (SS/Medicare)

NIIT (“ObamaCare tax”) == Net Investment Income Tax (supplemental Medicare tax on non-employment income for those with high income)

EITC == Earned Income Tax Credit

AMT == Alternative Minimum Tax

GSTT == Generation-Skipping Transfer Tax

Advisors and Brokers and Services

RIA == Registered Investment Advisor (the business)

IAR == Investment Advisor Representative (the person who works at an RIA)

AUM == Assets Under Management (often used as a basis for computing advisory fees)

B/D == Broker/Dealer

Investments

ETF == Exchange Traded Fund (A type of mutual fund (pooled investment) where shares of the pooled fund trade like individual stocks on the stock exchange, often but not always an index fund)

CEF == Closed End Fund (another type of mutual fund where one trades shares on the stock exchange, except these have a fixed number of shares)

E/R (or MER) == Expense Ratio (percentage of assets of a fund which the management deducts to pay for their services)

REIT == Real Estate Investment Trust (a pooled investment in real estate – may be equity (actually owns property) or debt (owns mortgages on property))

DAF == Donor Advised Fund (a charity to whom one might gift assets and subsequently recommend distributions be made to other charities)

I-Bonds == US Treasury Series I Savings Bonds

TIPS == Treasury Inflation Protection Securities (inflation-adjusted treasury bonds)

529 == Qualified Tuition Plan (a tax advantaged savings plan designed for college and other educational costs)

HSA == Health Savings Account

FSA == Flexible Savings Account (includes DCFSA == Dependent Care FSA and also Medical FSAs)

ESA / Coverdell ESA == Education Savings Account (largely replaced by 529s)

1031 == US code section 1031 Exchange (pertains to a capital-gains tax-free exchange of one investment for another, now mostly limited to investment real-estate)

DST == Delaware Statutory Trust (a pooled real estate investment vehicle which may also qualify for 1031 exchanges)

UTMA/UGMA == Uniform Trusts (Gifts) for Minors Act (accounts established for minors under special rules allowing a custodian to manage and control the assets while still getting to use the annual exclusion from gift taxes)

Loans and Mortgages and Credit

HELOC == Home Equity Line of Credit (borrowing against the equity in one’s home)

ARM == Adjustable Rate Mortgage

APR == Annual Percentage Rate (a percentage like an interest rate, but includes other charges or fees)

P&I == Principal and Interest (the two components of a mortgage payment)

LTV == Loan-to-Value ratio (ratio between outstanding principal of mortgage loan and appraised value of the home)

COFI == Cost Of Funds Index (an interest rate often used as a basis for adjustments for ARMS)

IO/PO == Interest-Only/Principal-Only

PITI == Principal, Interest, Taxes, and Insurance

PMI == Private Mortgage Insurance (paid by the borrower, insures the lender!)

Healthcare, Medicare, Medicaid

HDHP == High Deductible Health Plan

HSA (See above) == Health Savings Account

PCP == Primary Care Provider

Trusts and Estates

POA == Power of Attorney

DPOA == Durable Power of Attorney

CRT/CRAT/CRUT == Charitable Remainder (Annuity or Unitrust) Trust

CLT == Charitable Lead Trust

SLAT == Spousal Lifetime Access Trust

SNT == Special/Supplemental Needs Trust

QTIP == Qualified Terminable Interest Property trust

ILIT == Irrevocable Life Insurance Trust

GST == Generation-Skipping Trust

Organizations and Credentials

CFP(™) == Certified Financial Planner (refers to the credential. The individual with the credential is a CFP Professional)

CPA == Certified Public Accountant

EA == Enrolled Agent (generally a tax preparer, and like a CPA may represent you before the IRS)

CFA == Chartered Financial Analyst

RICP == Retirement Income Certified Professional

FPA == Financial Planning Association

NAPFA == National Association of Personal Financial Advisors (must be “fee-only” and do financial planning)

CPWA == Certified Private Wealth Advisor

AEP == Accredited Estate Planner

ChFC == Chartered Financial Consultant

FINRA == Financial Industry Regulatory Authority (government-authorized not-for-profit regulatory agency that oversees US Broker/Dealers and other financial industry participants)

FICO == Fair Isaac Corporation (provider of the “FICO score”, used for assessing credit risk)

Education

FAFSA == Free Application for Federal Student Aid (a national standardized application for financial aid for college, used by the vast majority of schools)

CSS/Profile == College Scholarship Service Profile (an alternative standardized application for financial aid used by a few schools, generally includes more assets than FAFSA)

DL == Direct Loan Program (US Dept of Ed program offering subsidized, unsubsidized, PLUS and Consolidation loans)

IBR == Income Based Repayment (Federal loan program with monthly payments capped based on income)

REPAYE == Revised Pay As You Earn Repayment Plan

PAYE == Pay As You Earn Repayment Plan

ICR == Income-Contingent Repayment Plan

PLUS == Parent Loan for Undergraduate Students (though they may also be for grad and professional students

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