Glossary
The words your benefits paperwork throws at you — translated into human. One line each.
401(k)Retirement
A retirement savings account offered through your employer. Money comes out of your paycheck before you ever see it, and it grows for your future self.
Employer matchRetirement
Free money your employer adds to your 401(k) when you contribute — but only up to a limit. If you contribute less than the limit, you leave free money behind.
VestingRetirement
How long you must stay at a company before the employer's contributions to your retirement account are fully yours to keep. Your own contributions are always 100% yours.
RMDRetirement
Required Minimum Distribution. The amount the IRS forces you to withdraw from your pre-tax retirement accounts each year once you reach a certain age (73 or 75, depending on when you were born). Skip it and you can owe a 25% penalty on the amount you should have taken.
QCDRetirement
Qualified Charitable Distribution. A way for people 70½ or older to send money directly from an IRA to a charity. It can count toward your RMD, and the amount never shows up in your taxable income — but it only helps if you were going to donate anyway.
HDHPHealthcare
High-Deductible Health Plan. A health insurance plan with lower monthly payments but a higher amount you must pay yourself before insurance kicks in.
HSAHealthcare
Health Savings Account. A special savings account paired with an HDHP where you can set aside pre-tax money for medical costs — and it can even grow like an investment account.
PPOHealthcare
Preferred Provider Organization. A type of health plan that lets you see almost any doctor without a referral, usually in exchange for higher monthly payments.
DeductibleHealthcare
The amount you must pay out of your own pocket each year before your health insurance starts paying its share.