Whats That Definition
401(k)
A 401(k) plan is a tax-advantaged, employer-sponsored retirement savings account in the United States that allows employees to contribute a portion of their wages to individual accounts.
Ownership shares in a company that represent a claim on its assets and earnings
Stocks
Wages
Hourly pay earned for work completed.
Principal
original sum of money invested in an account, or borrowed in a loan
The amount you pay out of pocket before the insurance company pays a claim
Deductible
Financial aid that doesn't need to be repaid, awarded based on various criteria
Scholarship or Grant
Interest
The cost of borrowing money or the earnings from investing money, usually expressed as a percentage rate
The amount paid for an insurance policy
Premium
W-4 Form
Filled out when starting a job—tells your employer how much federal tax to withhold from your paycheck.
Roth IRA
A retirement account where contributions are made with after-tax money, and withdrawals in retirement are tax-free
A tax-advantaged account designed to help individuals save for retirement.
IRA (individual retirement account)
Opportunity Cost
What you give up when you choose one thing over another—it's the "next best" option you didn’t choose.
Beneficiary
The person designated to receive benefits from an insurance policy or will
Set amount of extra time after a deadline during which a payment can be made or an action can be taken without incurring a penalty or late fee
Grace Period
Not having enough resources (like time, money, or materials) to get everything you want.
Scarcity