Qualified Distribution Definition How Plans Work and Taxation

Qualified Distribution Definition A qualified distribution refers to a withdrawal made from a retirement plan that meets certain requirements set by the Internal Revenue Service (IRS). These requirements are designed to ensure that the funds are used for retirement purposes and not for other non-retirement expenses. How Plans Work Retirement …

Overview of Government-Sponsored Retirement Arrangement (GSRA)

What is a Government-Sponsored Retirement Arrangement (GSRA)? A Government-Sponsored Retirement Arrangement (GSRA) is a retirement savings plan that is sponsored and administered by the government. It is designed to provide individuals with a way to save for retirement and ensure financial security in their later years. GSRAs are similar to …

Other Post-Retirement Benefits Explained: Meaning, Benefits, Cost

What are Other Post-Retirement Benefits? Other Post-Retirement Benefits (OPRB) refer to the benefits that an employer provides to its retired employees, in addition to the regular pension plan. These benefits are designed to support retirees in maintaining their quality of life and ensuring their well-being after they have stopped working. …

Nest Egg: Definition, Importance, How To Invest

Nest Egg: Definition, Importance, How To Invest A nest egg is a sum of money that has been set aside for a specific purpose, typically for retirement. It is a financial cushion that provides individuals with a sense of security and peace of mind for the future. Building a nest …

Needs Approach: And Implementing The Method

What is the Needs Approach? The needs approach is a method used in retirement planning to determine the financial requirements of individuals during their retirement years. It focuses on identifying and prioritizing the specific needs and goals of retirees, taking into account their lifestyle, health, and other factors that may …

Lifestyle Creep: Its Impact And Mechanisms

The Definition and Causes of Lifestyle Creep Lifestyle creep refers to the gradual increase in spending and expenses as an individual’s income increases. It is a phenomenon that occurs when people start earning more money and subsequently upgrade their lifestyle to match their new income level. As a result, they …

KSOP: The Basics And Exploring Alternatives

What is KSOP and How Does it Work? KSOP, or Key Employee Stock Ownership Plan, is a retirement plan that allows employees to become owners of the company they work for. It is a type of employee benefit plan that provides employees with the opportunity to acquire company stock as …

Kids in Parents’ Pockets Eroding Retirement Savings (KIPPERS)

Overview of KIPPERS Kids in Parents’ Pockets Eroding Retirement Savings (KIPPERS) is a term used to describe the financial burden that parents face when their adult children continue to rely on them for financial support, thus eroding their retirement savings. This phenomenon has become increasingly common in recent years, as …

Heroes Earned Retirement Opportunities Act: Providing Retirement Benefits for Heroes

Heroes Earned Retirement Opportunities Act: Providing Retirement Benefits for Heroes The Heroes Earned Retirement Opportunities Act (HERO Act) is a legislation aimed at providing retirement benefits for heroes who have served in the military or as first responders. This act recognizes the sacrifices and contributions made by these individuals and …

Financial Independence Retire Early (FIRE) Explained How It Works

What is Financial Independence Retire Early (FIRE)? FIRE is not about sacrificing your present happiness for a future retirement; it’s about finding a balance between enjoying your life now and planning for a secure future. The movement encourages individuals to live frugally, save aggressively, and invest wisely to build a …

Elective-Deferral Contribution Explained: Everything You Need to Know

What is an Elective-Deferral Contribution? An elective-deferral contribution is a type of retirement savings contribution that allows individuals to set aside a portion of their income on a pre-tax basis. This means that the contribution is deducted from the individual’s salary before taxes are calculated, reducing their taxable income for …

Distribution in Kind: Definition, Benefits, and About Payments

Distribution in Kind: Definition, Benefits, and About Payments Distribution in kind is a method of distributing assets or investments directly to the shareholders or investors, rather than converting them into cash. This type of distribution allows the shareholders to receive their share of the assets in the form of physical …

AARP Overview Affiliates Lobbying for Members Age 50+

AARP Overview: Advocating for Retirement Planning Why Retirement Planning Matters AARP recognizes the importance of retirement planning and the impact it can have on individuals’ quality of life. Through various initiatives and programs, AARP aims to educate and empower individuals to take control of their financial future and make informed …