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Retirement Planning

Compounding

Welcome to our lesson on finance related terms. Today, we will be discussing the concept of compounding, which is essential in understanding how to create wealth. Compounding refers to the process of earning money on an initial investment and its accumulated interest, typically calculated monthly or annually. It is considered one of the most effective methods for building wealth. Let's dive deeper into this concept and explore its benefits.

Target Benefit Plan Definition

A target benefit plan is a type of retirement plan where employers are obligated to make regular contributions to their employees' retirement accounts. This plan places the r...

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Tax-Free

A tax-free account that allows for the growth of earnings through interest, dividends, and capital gains without being subject to income tax. This type of account, such as a...

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Defined Benefit Plan

A retirement plan, referred to as a 'qualified plan', is structured to provide a benefit to employees upon retirement. The benefits are usually calculated as a percentage of...

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Recharacterization

One important concept to understand in finance is the ability to reverse a Roth IRA conversion or to redesignate funds between different types of plans. This allows individu...

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