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Glossary
Retirement & insurance terms, in plain English.
Short definitions of the words that come up when you save for retirement or protect your family, from 403(b) plans to final expense insurance.
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403(b) Plan
A tax-sheltered annuity retirement plan for employees of public schools, churches and other non-profit organizations. Contributions come out of each paycheck before…
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Annuity
A contract in which the owner pays an insurance company a single premium or a series of premiums, and the insurer promises…
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Equity Indexed Annuity (EIA)
A fixed annuity whose interest is determined, at least in part, by the performance of a market index such as the S&P…
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Final Expense Insurance
Life insurance sized to pay for a funeral, burial and final bills so the family is not left with them. The benefit…
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Flexible Premium Deferred Annuity (FPDA)
A tax-deferred annuity that accepts multiple payments while it is in its accumulation period: salary reduction, bank draft, transfers, rollovers or lump…
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Non-Qualified Annuity
An annuity bought with money that has already been taxed. Interest grows tax-deferred until it is withdrawn, and withdrawals are taxable only…
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Qualified Annuity
An annuity bought with pre-tax money, such as 403(b) salary contributions or an IRA. All withdrawals are taxed as ordinary income, and…
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Roth IRA
An individual retirement account funded with after-tax money; qualified withdrawals in retirement are tax-free. John Gilbert helps self-employed people and other individuals…
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Single Premium Deferred Annuity (SPDA)
A tax-deferred annuity that accepts a single payment, by check or through a transfer or rollover. It can be bought with qualified…
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Teacher Retirement System of Texas (TRS)
The pension plan for Texas public school employees. Its standard annuity pays 2.3% of the member's average salary for each year of…
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Term Life Insurance
Life insurance that covers a specific period of time. It gives the most coverage for the least cost compared with whole life,…
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Whole Life Insurance
Life insurance that lasts as long as premiums are paid. It combines three guarantees in one asset: a death benefit, fixed premiums…