The Retirement Solutionist
Marvin Mitchell
Resources
Links
Retirement & Income
• AARP
• CNN Money Retirement
• Smart Money Retirement
• Social Security Administration Retirement Planner
• US Department of Labor
• US Financial Literacy & Education Commission
Investments
• Brokerage Account Login
• Business Week Investing
• Fortune Investing
• Kiplinger
• The Motley Fool
• Yahoo! Finance
Taxes
• Internal Revenue Service
• DC Office of Tax & Revenue
• The Tax Foundation
• 360 Degrees of Financial Literacy
Education
• Education
• Education Planner
• New York Times Education News
• Saving for College.com
• Treasury Direct
• US Department of Education
Glossary
Account Management
Custodial - An account set up for a minor administered by a responsible adult, known as a custodian, because the minor is under the legal age of maturity
Individual - An account established in the name of one person
Joint - An account established by two or more persons
Annuities
Annuity - A financial product sold by financial institutions that is designed to accept and grow funds from an individual and then, upon annuitization, pay out a stream of payments to the individual at a later point in time. Annuities are primarily used as a means of securing a steady cash flow for an individual during their retirement years.
Fixed Annuity - An insurance contract in which the insurance company makes fixed dollar payments to the annuitant for the term of the contract, usually until the annuitant dies. The insurance company guarantees both earnings and principal.
Indexed Annuity - A special class of annuities that yields returns on your contributions based on a specified equity-based index. These annuities can be purchased from an insurance company, and similar to other types of annuities, the terms and conditions associated with payouts will depend on what is stated in the original annuity contract.
Variable Annuity - An insurance contract in which, at the end of the accumulation stage, the insurance company guarantees a minimum payment. The remaining income payments can vary depending on the performance of the managed portfolio.
Insurance
Life Insurance - A protection against the loss of income that would result if the insured passed away. The named beneficiary receives the proceeds and is thereby safeguarded from the financial impact of the death of the insured.
Long-term Care Insurance - Coverage that provides nursing-home care, home-health care, personal or adult day care usually for individuals above the age of 65 or with a chronic or disabling condition that needs constant supervision. LTC insurance offers more flexibility and options than many public assistance programs.
Investments
Managed Money - A means of investment where the investor, rather than buying and selling their own securities, places their investment funds in the hands of a qualified investment professional. Compass Retirement Solutions, LLC uses a professional company of money managers who are responsible for the securities portfolio of individual or institutional investors. The manager has the fiduciary responsibility to manage assets prudently and choose investments which provide the best opportunity for profit.
Mutual Fund - An investment entity that pools shareholder or unit holder funds and invests in various securities [stocks, bonds, commodities, options, money market instruments]. The units or shares are redeemable by the fund on demand by the investor. The value of the underlying assets of the fund influences the current price of units.
Securities & Brokerage Service - The common name for stocks, bonds, mutual funds and other investment vehicles. The entity that transacts the buying and selling of these vehicles on behalf of the client is the broker.
Retirement Savings Plans
Roth IRA - An individual retirement plan that bears many similarities to the traditional IRA, but contributions are not tax deductible and qualified distributions are tax free. Similar to other retirement plan accounts, non-qualified distributions from a Roth IRA may be subject to a penalty upon withdrawal.
Rollover - Transferring the holdings of one retirement plan to another without suffering tax consequences.
SEP IRA - A retirement plan established by employers, including self-employed individuals (sole proprietorships or partnerships). The SEP is an IRA-based plan to which employers may make tax-deductible contributions on behalf of eligible employees. The employer is allowed a tax deduction for plan contributions, which are made to each eligible employee's SEP IRA on a discretionary basis. Employees do not pay taxes on SEP contributions, but these contributions are taxed when the employee receives a distribution from the SEP IRA. Contributions to SEP IRAs are immediately 100% vested, and the IRA owner directs the investments.
Simple IRA - A retirement plan that may be established by employers, including self-employed individuals. The employer is allowed a tax deduction for contributions made to the SIMPLE. The employer makes either matching or non-elective contributions to each eligible employee's SIMPLE IRA and employees may make salary deferral contributions. Contributions to SEP IRAs are immediately 100% vested, and the IRA owner directs the investments.
Stretch IRA - Commonly used to describe an IRA established to extend the period of tax-deferred earnings, typically over multiple generations. In the short run, the concept is used to reduce the withdrawal required upon retired or at least age 70 1/2, thus helping to reduce one’s current income tax bill. In the long-run, extending the IRA payout until the designated beneficiary retires (usually a grandchild), earnings growth is further compounded throughout the years payments are deferred.
Traditional IRA - An individual retirement account (IRA) that allows individuals to direct pre-tax income, up to specific annual limits, toward investments that can grow tax-deferred (no capital gains or dividend income is taxed). Individual taxpayers are allowed to contribute 100% of compensation up to a specified maximum dollar amount to their Traditional IRA. Contributions to the Traditional IRA may be tax-deductible depending on the taxpayer's income, tax-filing status and other factors.
403(b) - Also known as a tax-sheltered annuity (TSA) plan, is a retirement plan for certain employees of public schools, employees of certain tax-exempt organizations and certain ministers. Individual accounts can be any of the following types: An annuity contract, which is provided through an insurance company A custodial account, which is invested in mutual funds A retirement income account set up for employees of religious institutions
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