Chapter 15, Retirement and Estate Planning

401k

A plan available through companies that operate for a profit; taxes are deferred until the money contributed is withdrawn

403b

A plan for employees of government or not-for-profit organizations; taxes are deferred until the money contributed is withdrawn

IRA (Individual Retirement Account)

A tax-sheltered retirement plan to which working people make annual contributions of up to $2,000 per year.

vested

a certain number of years or other condition of employment has passed.

Probate

a court process when a will is validated and processed.

power of attorney

a legal document authorizing someone to act on your behalf

Will

a legal document that tells us how you want your estate to be distributed after your death.

defined contribution plan

a minimum contribution is made by both employer and employee; no particular benefit is promised

defined benefit plan

contract specifies the benefits promised to the employee at normal retirement age.

estate planning

is the process of planning for the administration and transfer of property during one's lifetime at one's death

Keough Plan

self-employed individuals and their employees may to contribute to a

Testator

the person who makes or draws a will

Estate

when a person is living, all he or she owns, less debt owed is called