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
-
Income Planning 101
You’ve spent the last few decades saving for retirement but are you truly prepared? To help address any concerns or uncertainties you may have, you need an income plan – one that considers every f… -
Maximizing Your Social Security Income
Social Security can serve as a safety net for many retirees, sometimes acting as a primary source of income. However, the program is highly complex with over 500 ways to claim benefits. Even one o… -
How Much Money Can I Spend in Retirement?
“How much can my spouse and I realistically spend in retirement at age 62 with $1 million saved?” Today’s hypothetical couple is asking the very question that most pre-retirees ponder when gearing… -
How Will I Receive Income from My Retirement Savings?
Today’s question centers around the core of retirement planning – how do I turn my retirement savings into retirement income? After decades of building up your nest egg, life after work introduces… -
What to Consider Before Moving in Retirement
If you have the liberty to relocate in retirement, does that mean you should? Maybe you’re a snowbird who wants to live down South full-time, or maybe you want to stick it out in the cold and spen… -
What Habits Should I Unlearn Before I Retire?
Today’s insightful question explores the behavioral finance side of retirement planning – specifically, which financial habits you should leave in the rearview as you transition into retirement. … -
How Can You Understand and Improve Your Credit Score?
In retirement, your credit score is still relevant in achieving and maintaining financial independence. The question is, how can you best understand and improve your score to reap the benefits of … -
How to Financially Plan for a New Presidential Administration
A new presidential administration is set to take office next year, and while there are a lot of uncertainties around what a second Trump term could bring, it’s important to stay the course in your… -
Magic Retirement Number
Do you know your magic retirement number? This is the amount of money you need to retire – and it’s different for everyone. Let’s explore how to calculate your number, how it compares to the rest … -
Should I Consolidate My Multiple 401(k) Accounts?
If you’ve contributed to multiple 401(k) or other employer sponsored plans over the years, you may be wondering about today’s question, is it time to roll your old accounts into an IRA? In this we…
