Dave Ramsey Chapter 3 vocab

401k
Defined contribution plan offered by a corporation to its employees, which allows employees to set aside tax-deferred income for retirement purposes.
403B
Retirement plan similar to a 401k plan but one that is offered by non profit organizations such as hospitals, schools, and some charitable organizations rather than corporations.
457 plan
Non qualified, deferred compensation plan established by state and local governments for tax exempt government agencies and tax exempt government agencies and tax exempt employees.
529 plan
college savings plan that allows individuals to save on a tax deffered basis in order to fund future college and graduation school expances or a child or beneficiary.
Custodian
One who is responsible for an account listed in someones else’s name.
Direct Transfer
Movement of tax deferred retirment plan money from one qualified plan or custodian to another.
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ESA
After tax college fund that grows tax free for educational uses eligibility based on parents annual income.
IRA
Tax deffered arrangements for individuals with earned income and their non income producing spouces growth is not taxed until money is withdrawn.
Pre Paid Tuition
Paying for college ahead of tie by accumulating units of tuition.
Rollover
Movement of funds from a tax deferred retirement plan from one qualified plan or custodian to another.
Roth IRA
Retirement account funded with after tax dollars that subsequently grows tax free.
SEPP
Pension plan in which both the employee and the employer contribute to an individual retirement account.
Tax Favored Dollars
Money that is working for you either tax deferred or tax free within a retirement plan.
UGMA
Legislation that provides a tax effective manner of transferring property to minors without the complications of trusts or guardianship restrictions.
UTMA
Law similar to the uniform gifts to minors act that extends the definition of gifts to include real estate paintings royalties and patents.