Retirement Glossary

Clear explanations for complex retirement terms—because planning your future shouldn’t require a translator.

Retirement planning comes with its own language—acronyms, buzzwords, and financial jargon that can leave anyone scratching their head. This glossary is here to help you feel confident and informed. Each section is grouped by topic so you can quickly find what you need, when you need it.

Annuity
A contract with an insurance company that provides regular payments for life or a set period, often used for retirement income.

Required Minimum Distribution (RMD)
The amount the IRS requires you to withdraw annually from certain retirement accounts starting at age 73 (or 75, depending on birth year).

Withdrawal Rate
How much you withdraw from your savings each year—often expressed as a percentage of your portfolio.

Guaranteed Lifetime Withdrawal Benefit (GLWB)
An annuity feature that allows withdrawals for life, even if the account balance drops to zero.

Pension
A retirement income stream provided by an employer, often based on years of service and salary history.

Deferred Income Annuity (DIA)
An annuity where payments start at a future date, often used to plan for later-life income.

Income Floor
The minimum monthly or annual income you know will be available to cover essential expenses in retirement.

Social Security
A government program that provides retirement income based on your work history and age of claiming.

Laddering
A strategy using a series of bonds or annuities with staggered maturity dates to create consistent income.

Bridge Strategy
Using personal savings or temporary income to delay claiming Social Security for larger future benefits.

Asset Allocation
Mixing investments (stocks, bonds, cash) to balance risk and reward based on your goals and timeline.

Diversification
Spreading investments across various asset types to reduce risk—don’t put all your eggs in one basket.

Sequence of Returns Risk
The risk that poor market performance early in retirement could reduce your portfolio’s ability to last.

Rebalancing
Adjusting your portfolio back to its target allocation after market movements have shifted it.

Principal Protection
Investment strategies or products designed to ensure you don’t lose your original investment.

Bi-Directional Strategy
An investment approach that seeks returns in both rising and falling markets—think “up or down, we’ve got a plan.”

Structured Notes
Customizable investments that can offer downside protection and upside participation, often with a fixed term.

Index Fund
A fund designed to track a market index, like the S&P 500, often with lower fees than actively managed funds.

Target-Date Fund
A mutual fund that automatically adjusts its asset mix based on your expected retirement date.

Risk Tolerance
Your emotional and financial capacity to handle investment ups and downs.

Tax-Deferred
Earnings grow without being taxed until withdrawal—common in 401(k)s and traditional IRAs.

Roth IRA
A retirement account funded with after-tax dollars that grows tax-free and offers tax-free withdrawals.

Roth Conversion
Moving money from a traditional IRA to a Roth IRA, triggering taxes now for potential tax-free growth later.

Capital Gains
The profit from selling an asset like stocks or real estate, subject to taxes.

Step-Up in Basis
A tax benefit that adjusts the value of inherited assets to their current market value, potentially reducing capital gains tax.

Tax Bracket
The percentage of tax you pay based on your income. Retirement planning often involves managing which bracket you fall into.

Tax Drag
The erosion of investment returns due to taxes on interest, dividends, and capital gains.

Qualified Dividend
A type of dividend that is taxed at a lower rate than ordinary income.

Net Investment Income Tax (NIIT)
A 3.8% surtax on investment income for higher earners—often overlooked in retirement planning.

Qualified Charitable Distribution (QCD)
A tax-savvy move for those over 70½: donate from your IRA directly to a charity and avoid counting it as taxable income.

Long-Term Care (LTC)
Non-medical support for daily activities like dressing, eating, and bathing due to chronic illness or aging.

Activities of Daily Living (ADLs)
Basic tasks (e.g., bathing, toileting) that determine whether LTC benefits can be triggered.

LTC Rider
An add-on to a life insurance or annuity policy that provides funds for long-term care needs.

Elimination Period
The waiting time (similar to a deductible) before LTC insurance benefits begin paying out.

Medicare
Federal health insurance for people over 65, covering hospital and medical expenses but not most long-term care.

Medigap
Supplemental insurance that helps pay for Medicare’s “gaps,” like copays and deductibles.

Hybrid LTC Policy
A combo of life insurance or an annuity with LTC benefits—if you don’t use the care, your heirs may get the death benefit.

Benefit Pool
The total amount of money available for long-term care under your policy.

Inflation Protection
A feature in LTC policies that increases your benefit over time to keep pace with rising care costs.

Advance Directive
A legal document that spells out your healthcare wishes if you become unable to communicate them.

Beneficiary
The person or entity you designate to receive your assets when you pass away.

Durable Power of Attorney (DPOA)
Gives someone legal authority to act on your behalf in financial matters if you’re incapacitated.

Revocable Living Trust
Lets you control and transfer your assets without probate while alive and after death.

Will
A legal document outlining how you want your assets distributed after death.

Probate
The court-supervised process of distributing your assets after death, often time-consuming and public.

Executor
The person named in your will who is responsible for carrying out its instructions.

Trustee
The individual or institution managing assets in a trust on behalf of beneficiaries.

Estate Tax
A tax on your estate’s value at death—can be federal or state, depending on size and location.

Per Stirpes
A way to divide your estate so that if a beneficiary has passed, their share goes to their heirs.

Letter of Intent
A non-binding note left with your estate documents to guide your executor or heirs with personal wishes or explanations.

Retirement Lifestyle Plan (RLP)
Your personalized blueprint for retirement—designed around your goals, income needs, tax position, investment strategy, and healthcare protection. Built collaboratively, refined continuously.

SitRep (Situation Report)
Our deep-dive report on where you stand today financially. It’s the launchpad for all your planning conversations, showing strengths, gaps, and opportunities.

Trust & Respect Meeting (T&R)
Our first meeting together—30 minutes, no prep, no pressure. It’s a two-way interview to explore whether we’re a good fit.

Planning Pillars
The five core areas we focus on for every client: Income Security, Portfolio Protection, Tax Strategy, Healthcare Planning, and Legacy Planning.

Deployment Meeting
The session where your Retirement Lifestyle Plan gets its tactical shape—allocations, product solutions, and priority steps laid out clearly.

Delivery & Onboarding Meeting
We hand off your completed RLP, walk through the systems and tools, and welcome you into the LP client community.

LTC Advantage
Our signature long-term care planning strategy—built to help fund future care needs without sacrificing lifestyle or legacy.

Leverage Planners Performance Pledge
A trust-focused promise: households fully invested in our principal-protected and structured portfolios may pause billing if markets fail to deliver target returns.

Ambassador Program
Our client appreciation and referral experience—recognizing those who introduce friends or family to Leverage Planners in a no-pressure, gratitude-first way.

BlueJean Millionaires
Our affectionate nickname for everyday clients who’ve built wealth with grit and frugality—not flash. They value clarity, protection, and purpose over complexity or flash.