Dave Ramsey Chapter 3 vocab
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401k
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Defined contribution plan offered by a corporation to its employees, which allows employees to set aside tax-deferred income for retirement purposes.
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403B
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Retirement plan similar to a 401k plan but one that is offered by non profit organizations such as hospitals, schools, and some charitable organizations rather than corporations.
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457 plan
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Non qualified, deferred compensation plan established by state and local governments for tax exempt government agencies and tax exempt government agencies and tax exempt employees.
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529 plan
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college savings plan that allows individuals to save on a tax deffered basis in order to fund future college and graduation school expances or a child or beneficiary.
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Custodian
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One who is responsible for an account listed in someones else's name.
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Direct Transfer
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Movement of tax deferred retirment plan money from one qualified plan or custodian to another.
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ESA
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After tax college fund that grows tax free for educational uses eligibility based on parents annual income.
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IRA
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Tax deffered arrangements for individuals with earned income and their non income producing spouces growth is not taxed until money is withdrawn.
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Pre Paid Tuition
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Paying for college ahead of tie by accumulating units of tuition.
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Rollover
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Movement of funds from a tax deferred retirement plan from one qualified plan or custodian to another.
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Roth IRA
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Retirement account funded with after tax dollars that subsequently grows tax free.
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SEPP
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Pension plan in which both the employee and the employer contribute to an individual retirement account.
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Tax Favored Dollars
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Money that is working for you either tax deferred or tax free within a retirement plan.
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UGMA
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Legislation that provides a tax effective manner of transferring property to minors without the complications of trusts or guardianship restrictions.
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UTMA
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Law similar to the uniform gifts to minors act that extends the definition of gifts to include real estate paintings royalties and patents.
