What Does it Mean? Simple Definitions of Common Financial Terms
There’s a lot of lingo in financial services, just as there can be in many other technical industries.
Here are simple explanations of a few terms that people find confusing:
Roth IRA Conversions
Many people confuse a Roth IRA conversion with a Roth IRA contribution. The two are very different.
The conversion happens when you take all that pre-tax money you’ve been contributing to your retirement account and move it into a Roth IRA. You’ll pay income taxes immediately on the money you transfer but it can grow tax-free from that point forward. You can convert as little or as much money as you’d like. There’s no cap…for now, at least. There’s talk on Capitol Hill about eliminating or capping conversions so it may be smart to act now while the opportunity still exists.
We’re happy to help you determine if a conversion is in your best interest. Just contact us and we’ll set up an appointment.
Fiduciary
Have you heard this word used to describe a financial advisor but didn’t know what it meant? A fiduciary is a professional who is obligated to make decisions that are in the best interest of their client regardless of how much the fiduciary is being compensated. To be clear, an advisor doesn’t haven’t be a fiduciary to do a good job for you, but it’s important to know whether they are one. Everyone in our office who meets with clients is a fiduciary.
In the world of financial services, ignorance is not bliss. We want all Johnson Brunetti clients to know what they’re investing in and why. So, please ask us for definitions and explanations of terms or concepts you don’t understand. We’re happy to help.
Information presented in our podcasts is considered current as of the created date. Over time, some information presented may become stale. We recommend you consult with your Financial Professional before making any changes based on information contained here.
Johnson Brunetti is a marketing name for the businesses of JB Capital and JN Financial.
Investment Advisory Services offered through JB Capital, LLC. Insurance Products offered through JN Financial, LLC.
The guarantees provided by any type of insurance contract are based on the claims-paying ability of the insurance company.
Related Resources
-
Podcast Episode 406: What Happens in the Money Map Retirement Review
What happens after your first meeting with a financial advisor? We’re looking inside meeting number two in our retirement planning process, which we like to call the “Money Map Retirement Review.”… -
Podcast Episode 405: Inside the Discovery Meeting
Many people feel hesitant or intimidated about meeting with a financial advisor. They may worry about facing a high-pressure sales pitch or feel unprepared for the questions that could arise. At J… -
How Does a Tax Return Work?
As tax season concludes, it’s a good time to refresh your tax knowledge. In this week’s Money Wisdom Question Series, Ian Fergusson, RICP® discusses how filing your taxes works and why it’s essen… -
What Is a Fiduciary?
When it comes to managing your money, trust is everything. That’s why today’s question is one of the most common and important ones we receive: What is a fiduciary? In this week’s Money Wisdom … -
Podcast Episode 404: Financial Goals You Shouldn’t Overlook
When it comes to preparing for retirement, most people focus on the obvious goals of saving enough and building an emergency fund. But in this episode of Money Wisdom, Jake Doser, CFP®, CPWA® and … -
Understanding Retirement Planning
Planning for retirement isn’t just about saving – it’s about making smart financial decisions at every stage of life. A better understanding of the financial industry can help you avoid costly mis… -
Podcast Episode 403: How to Approach Finances in a Second Marriage Later in Life
Getting engaged later in life is an exciting time, but it requires different financial planning conversations. With blended families, different retirement timelines, and evolving goals, couples in… -
Can I Get ‘Out’ of a Fixed-Rate Vehicle?
When you lock into a fixed-rate vehicle like a CD, fixed annuity, or fixed-indexed annuity, you’re committed to a specific interest rate for a set period. But what happens when after a few years, … -
Podcast Episode 402: How Often Should You Meet with Your Financial Advisor?
A good relationship between a client and their financial advisor relies on clear communication and regular check-ins to ensure everything is on track. In this episode of the Money Wisdom podcast, … -
Are You Paying Too Much in Taxes in Retirement?
You’ve worked hard to build your retirement savings, but have you thought about how much of it you’ll get to keep after taxes? Unfortunately, many retirees pay more in taxes than they expected sim…
