Retirement, explained simply.

A 401(k) is an employer-sponsored retirement savings plan that lets you contribute pre-tax dollars, reducing your taxable income today while your investments grow tax-deferred.

A 403(b) is a tax-advantaged retirement savings plan similar to a 401(k), available to employees of public schools, nonprofits, and certain other tax-exempt organizations.

After-tax contributions are retirement account contributions made with money you've already paid income tax on, which can be converted to Roth accounts for tax-free future growth.

An annuity is a financial product that provides a stream of income payments, often used to guarantee income throughout retirement.

The backdoor Roth is a strategy that allows high-income earners who exceed Roth IRA income limits to make Roth contributions indirectly through a traditional IRA conversion.

The bucket strategy divides retirement savings into short-term, mid-term, and long-term segments to balance immediate income needs with continued portfolio growth.

Catch-up contributions allow workers aged 50 and older to contribute extra money to retirement accounts beyond standard annual limits, helping them accelerate savings before retirement.

A defined-benefit plan is a traditional pension that promises a specific monthly retirement income based on your salary and years of service, with the employer bearing investment risk.

A defined-contribution plan specifies how much employers and employees can contribute to a retirement account, but the ultimate benefit depends on investment performance.

Early retirement means leaving the workforce before the traditional retirement age of 65, requiring substantial savings, careful planning, and strategies to bridge income gaps.

An employer match is free money your company contributes to your retirement account to match a portion of your own contributions — widely considered the best return on investment available.

FIRE stands for Financial Independence, Retire Early — a movement centered on extreme saving and investing to achieve financial independence and retire decades ahead of the traditional timeline.

A glide path is the planned shift in a portfolio's asset allocation from aggressive to conservative as an investor approaches and moves through retirement.

An HSA is a triple-tax-advantaged account for healthcare expenses that can also serve as a powerful supplemental retirement savings vehicle.

An in-service withdrawal allows you to take money from your employer-sponsored retirement plan while you are still actively employed, subject to plan rules and tax implications.

Longevity risk is the chance that you will outlive your retirement savings, making it one of the most significant financial risks retirees face.

The mega backdoor Roth is an advanced strategy that allows high earners to contribute up to $46,500 in after-tax money to a 401(k) and convert it to Roth savings.

A pension is an employer-funded retirement plan that promises a fixed monthly income in retirement based on years of service and salary history.

A pension buyout is a lump-sum payment offered by an employer in exchange for giving up your future monthly pension benefits.

Profit sharing is a type of employer retirement contribution that allocates a portion of company profits to employee retirement accounts, often in addition to regular matching contributions.

A required minimum distribution (RMD) is the minimum amount the IRS requires you to withdraw annually from most retirement accounts starting at age 73.

Retirement age refers to when you become eligible for Social Security benefits or choose to stop working, with key thresholds at 62, full retirement age (66–67), and 70.

A retirement calculator is a tool that projects whether your savings will be sufficient for retirement by modeling your income, savings rate, investment growth, and retirement expenses.

The retirement gap is the shortfall between the income you will need in retirement and the income your current savings trajectory is projected to provide.

Retirement income is the money you receive during retirement from sources such as Social Security, pensions, investment withdrawals, and part-time work.

A retirement readiness score is a single metric that estimates how well-prepared you are to meet your retirement income needs based on your current savings trajectory.

The retirement spending smile describes the U-shaped pattern of spending in retirement — higher early on, lower in middle years, and rising again due to healthcare costs.

A rollover IRA receives funds transferred from an employer-sponsored retirement plan like a 401(k), preserving tax-deferred status while giving you control over investment choices.

A Roth IRA is an individual retirement account where you contribute after-tax dollars and your investments grow tax-free, with tax-free withdrawals in retirement.

The safe withdrawal rate is the percentage of your retirement portfolio you can spend each year without running out of money over a typical retirement period.

A SEP IRA (Simplified Employee Pension) is a high-limit retirement account designed for self-employed individuals and small business owners.

Sequence of returns risk is the danger that poor investment returns early in retirement can permanently deplete a portfolio, even if average long-term returns are acceptable.

A SIMPLE IRA is a low-cost, easy-to-administer retirement plan designed for small businesses with 100 or fewer employees that includes required employer contributions.

Social Security is a federal program that provides retirement, disability, and survivor benefits funded by payroll taxes paid throughout your working years.

Social Security benefits provide monthly income in retirement based on your lifetime earnings record, with the amount determined by when you claim and how much you earned.

A spousal IRA allows a working spouse to contribute to an IRA on behalf of a non-working or low-earning spouse, helping couples maximize retirement savings together.

SEPP allows you to take penalty-free withdrawals from retirement accounts before age 59 1/2 by committing to a series of substantially equal periodic payments.

A target-date fund is a single diversified investment that automatically shifts from growth-oriented to conservative allocations as you approach your target retirement year.

A traditional IRA lets you contribute pre-tax dollars that grow tax-deferred, with withdrawals taxed as ordinary income in retirement.

Vesting is the process by which employees earn ownership of employer-contributed retirement benefits over time, typically requiring a minimum number of years of service.