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Stocks

A stock (also known as "shares" or "equity) is a type of security that signifies proportionate ownership in the issuing corporation. This entitles the stockholder to that proportion of the corporation's assets and earnings. Stocks are bought and sold predominantly on stock exchanges, though there can be private sales as well, and they are the foundation of nearly every portfolio. These transactions have to conform to government regulations which are meant to protect investors from fraudulent practices. Historically, they have outperformed most other investments over the long run.

Municipal Bonds

A municipal bond is a debt security issued by a state, municipality or county to finance its capital expenditures, including the construction of highways, bridges or schools. Municipal bonds are exempt from federal taxes and most state and local taxes, making them especially attractive to people in high income tax brackets.

Certificates of Deposit

A certificate of deposit (CD) is a savings certificate with a fixed maturity date and specified fixed interest rate that can be issued in any denomination aside from minimum investment requirements. A CD restricts access to the funds until the maturity date of the investment. CDs are generally issued by commercial banks and are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per individual. 

Rollover Iras

A rollover Individual Retirement Account (IRA) is an account that allows for the transfer of assets from an old employer-sponsored retirement account to a traditional IRA. The purpose of a rollover IRA is to maintain the tax-deferred status of those assets. Rollover IRAs are commonly used to hold 401(k), 403(b) or profit-sharing plan assets that are transferred from a former employer's sponsored retirement account or qualified plan.

Uniform Transfers to Minors Act

The Uniform Transfers to Minors Act (UTMA) allows a minor to receive gifts—such as money, patents, royalties, real estate, and fine art—without the aid of a guardian or trustee. Under the UTMA, the gift giver or an appointed custodian manages the minor's account until the latter is of age. The Act also shields the minor from tax consequences on the gifts, up to a specified value.

403(b) Plans

A 403(b) Plan is a retirement plan for specific employees of public schools, tax-exempt organizations and certain ministers. These plans can invest in either annuities or mutual funds. A 403(b) plan is also another name for a tax-sheltered annuity plan, and the features of a 403(b) plan are comparable to those found in a 401(k) plan.

AnnuitIes

An annuity is a financial product that pays out a fixed stream of payments to an individual, primarily used as an income stream for retirees. Annuities are created and sold by financial institutions, which accept and invest funds from individuals and then, upon annuitization, issue a stream of payments at a later point in time. The period of time when an annuity is being funded and before payouts begin is referred to as the accumulation phase. Once payments commence, the contract is in the annuitization phase.

RETIREMENT PLANNING

Retirement planning involves preparing today for your future so that you can continue to meet all your goals and dreams independently. This involves setting your retirement goals, determining the amount of funds you will need, and investing to grow your retirement savings. Retirement planning includes determining sources of income, assessing expenses, implementing a savings plan, and managing assets and risk. Future cash flows are estimated to indicate whether the retirement income goal will be achieved.

Stock Options

A stock option gives an investor the right, but not the obligation, to buy or sell a stock at an agreed upon price and date. There are two types of options: puts, which is a bet that a stock will fall, or calls, which is a bet that a stock will rise.

Mutual Funds

A mutual fund is a type of financial vehicle made up of a pool of money collected from many investors to invest in securities such as stocks, bonds, money market instruments, and other assets. Mutual funds are operated by professional money managers, who allocate the fund's assets and attempt to produce capital gains or income for the fund's investors. A mutual fund's portfolio is structured and maintained to match the investment objectives stated in its prospectus.

Individual retirement accounts

An individual retirement account (IRA) is a tax-advantaged investing tool that individuals use to earmark funds for retirement savings. There are several types of IRAs: Traditional IRAs, Roth IRAs, SIMPLE IRAs, and SEP IRAs. Sometimes referred to as individual retirement arrangements, investments held in IRAs can encompass a range of financial products, including stocks, bonds, ETFs, and mutual funds.

Simple Iras

A SIMPLE IRA is a retirement plan that may be established by employers, including self-employed individuals (sole proprietorships and partnerships), for the benefit of their employees. The acronym stands for "Savings Incentive Match Plan for Employees." The SIMPLE IRA allows eligible employees to contribute part of their pretax compensation to the plan. This means the tax on the money is deferred until it is distributed. This contribution is called an elective-deferral or salary-reduction contribution. Employers are required to make either matching contributions – based only on elective-deferral contributions made by employees – or nonelective contributions, which are paid to each eligible employee regardless of whether the employee made salary-reduction contributions to the plan. For a matching contribution, the employer's contribution may match the employee's elective-deferral contribution dollar for dollar, up to a maximum of 3% of the employee's compensation. Like other employer plans, the SIMPLE IRA allows employers a tax deduction for contributions they make to the SIMPLE IRA plan.

Uniform Gifts to Minors Act

The Uniform Gifts to Minors Act (UGMA) allows individuals to give or transfer assets to underage beneficiaries—traditionally, parents and their children, respectively. The amount is free of gift tax, up to a certain amount. The assets are usually placed in UGMA accounts on behalf of minors, eliminating the need for an attorney to establish a special trust fund. UGMA funds are also subject to special tax treatment.

457 Plans

457 Plan refers to a non-qualified, tax-advantaged deferred compensation retirement plan. Eligible employees are allowed to make salary deferral contributions to the 457 plan. Earnings grow on a tax-deferred basis and contributions are not taxed until the assets are distributed from the plan.

Life Insurance

Life insurance is a contract between an insurer and a policyholder in which the insurer guarantees payment of a death benefit to named beneficiaries upon the death of the insured. The insurance company promises a death benefit in consideration of the payment of premium by the insured.

Corporate BOnds

A corporate bond is a debt security issued by a corporation and sold to investors. The backing for the bond is usually the payment ability of the company, which is typically money to be earned from future operations. In some cases, the company's physical assets may be used as collateral for bonds.

Treasury Securities

When it comes to conservative investments, nothing says safety of principal like Treasury securities. These instruments have stood for decades as a bastion of safety in the turbulence of the investment markets — the last line of defense against any possible loss of principal. The guarantees that stand behind these securities are indeed regarded as one of the key cornerstones of both the domestic and international economy, and they are attractive to both individual and institutional investors for many reasons.

Roth Iras

A Roth IRA is an individual retirement plan (a type of qualified retirement plan) that bears many similarities to the traditional IRA. The biggest distinction between the two is how they’re taxed. Traditional IRA contributions are generally made with pretax dollars; you usually get a tax deduction on your contribution and pay income tax when you withdraw the money from the account during retirement. Conversely, Roth IRAs are funded with after-tax dollars; the contributions are not tax deductible—although you may be able to take a Saver's Tax Credit of 10% to 50% of the contribution, depending on your income and life situation. But once you start withdrawing funds, qualified distributions (see below) are tax free. Similar to other individual retirement plan accounts, the money invested within the Roth IRA grows tax free.

SEP IRAS

An SEP is a retirement savings plan established by employers, including self-employed individuals (independent contractors- sole proprietorships or partnerships) for the benefit of their employees. Employers may make tax-deductible contributions on behalf of eligible employees – including the business owner – to their SEP IRAs. SEP IRA contributions are made to each eligible employee's SEP IRA on a discretionary basis. That means that the employer can choose to contribute (or not) each year. However, if the employer does contribute, it must contribute the same percentage of compensation to all employees eligible for the plan, up to the contribution limit. Employees do not pay taxes on SEP plan contributions. However, distributions of these amounts plus any earnings are subject to income taxes.

529/Coverdell Plans

529 plans (also known as "qualified tuition programs") were created to allow taxpayers a tax-advantaged way to save for higher education expenses for a designated beneficiary. A 529 plan may be provided by a state, an agency of the state or by an educational institution.

Like the Coverdell education savings account (ESA), the 529 plan is designed for education expenses. Contributions are made with after-tax dollars. Earnings accumulate on a tax-deferred basis and distributions that are used for qualified education expenses are tax-free and penalty-free.

Managed Accounts

A managed account is an investment account that is owned by a single investor, either by an institutional investor or an individual or retail investor. A professional money manager, hired by the investor oversees the account. Armed with discretionary authority over the account, this dedicated manager actively makes investment decisions pertinent to the individual, considering the client's needs and goals, risk tolerance, and asset size.

FINANCIAL PLANNING

Financial planning is a process, not a product. It is a process of devising financial plans in regards to the acquiring, investing, and administering of funds to meet life goals; both short-term and long-term. It also helps make advance provisions for the needs that are likely to arise in the future, thus preventing financial stress and risky emergencies. Financial planning is a long-term technique for wisely managing your finances so you can attain your goals and dreams, while at the same time working through the financial hurdles that inevitably arise in every stage of life.