Ritholtz Wealth Management’s wealth management glossary covers the account, tax and retirement terms analytically minded do-it-yourself investors meet before retirement.
Ritholtz Wealth Management favors plain definitions and the trade-offs behind them, because a spreadsheet can be precise while omitting tax or concentration risk. Investments can lose value, including the money originally invested.
Use these entries when you are reviewing paperwork, comparing a rollover, or checking an assumption in your retirement model. Ritholtz Wealth Management uses evidence from long-term research and diversification, not a market forecast, when discussing these choices.
4
- 401(k) rollover to an IRA
- A 401(k) rollover to an IRA moves money from a former employer’s 401(k) into an individual retirement account. A direct rollover sends the funds between custodians; having the check paid to you creates more paperwork and a short clock.
- 403(b) plan
- A 403(b) plan is a workplace retirement account commonly offered by public schools, hospitals and certain nonprofit employers. For 2026, the employee deferral limit is $24,500, before any available catch-up contribution.
A
- Asset allocation
- Asset allocation is the mix of stocks, bonds, cash and other investments in a portfolio. A 70% stock and 30% bond mix will usually behave very differently from a 40% stock and 60% bond mix when markets fall.
B
- Beneficiary
- A beneficiary is the person, trust or organization named to receive an account or insurance proceeds after the owner dies. The designation on an IRA or life insurance policy can control that asset even when a will says something else.
- Bond
- A bond is a loan to a government, company or other issuer that generally pays interest and returns principal at maturity. Bonds can still lose value when rates rise, an issuer struggles or inflation erodes what future payments buy.
C
- Capital gains distribution
- A capital gains distribution is a mutual fund payment of gains the fund realized by selling investments. In a taxable account, it can create a tax bill even if you reinvest every dollar and never sold a fund share yourself.
- Cost basis
- Cost basis is generally the amount used to calculate gain or loss when you sell an investment in a taxable account. If you bought $40K of shares and sell them for $55K, the starting gain is $15K before adjustments.
D
- Deferred compensation plan
- A deferred compensation plan lets an employee postpone receiving part of current pay until a later date, often retirement. The plan’s paperwork matters because payment timing, investment choices and creditor protections can differ sharply from a 401(k).
- Diversification
- Diversification spreads money across investments so one company, sector or market event has less power over the whole portfolio. Holding a broad fund is not full diversification if a large share of your net worth remains in employer stock.
E
- Exchange-traded fund (ETF)
- An exchange-traded fund is a pooled investment that trades on an exchange during the day, much like a stock. An ETF can hold hundreds of securities, but its diversification and tax treatment depend on what the fund actually owns.
- Expense ratio
- An expense ratio is the annual fund cost expressed as a percentage of assets. On a hypothetical $600K holding, a 0.45% higher expense ratio costs $2,700 a year before growth, or $81K over 30 years before growth.
F
- Fiduciary
- A fiduciary is a person or organization with a legal duty to put another party’s interests first in a particular relationship. The duty and its scope depend on the role, the account and the governing law, so ask what applies.
H
- Health savings account (HSA)
- A health savings account is a tax-advantaged account available to people covered by an eligible high-deductible health plan. For 2026, the contribution limit is $4,400 for self-only coverage and $8,750 for family coverage.
I
- Income-related monthly adjustment amount (IRMAA)
- IRMAA is an added Medicare premium for people whose modified adjusted gross income exceeds set thresholds. For 2026 premiums, 2024 MAGI is used; a large Roth conversion or stock sale can affect what you pay later.
- Individual retirement account (IRA)
- An individual retirement account is a personal retirement account with tax rules set by federal law. Traditional and Roth IRA contributions share a 2026 limit of $7,500, or $8,600 for someone age 50 or older.
- Inflation risk
- Inflation risk is the chance that rising prices reduce what your savings and fixed income can buy. A retirement plan that looks adequate at $8K a month today may buy less over time, even if the account balance never declines.
L
- Liquidity
- Liquidity is how quickly an asset can be turned into spendable cash without a large discount or delay. A diversified portfolio can still have a liquidity problem if near-term spending is tied up in a private investment or concentrated stock.
M
- Monte Carlo analysis
- Monte Carlo analysis uses many simulated return and inflation sequences to test whether a retirement spending plan might hold up. Its probability is only as useful as its assumptions, so it is a stress test, not a market forecast.
P
- Pension
- A pension is an employer-provided arrangement that may pay a monthly retirement benefit, often for life, under plan rules. Before choosing a lump sum or monthly payment, compare survivor options, inflation features and the income your household needs.
R
- Rebalancing
- Rebalancing means bringing a portfolio back toward its chosen asset allocation after markets move it off target. If a 60% stock allocation rises to 70%, rebalancing may mean selling some stocks or directing new cash to bonds.
- Required minimum distribution (RMD)
- A required minimum distribution is the minimum amount federal tax law generally requires you to withdraw from certain retirement accounts each year. RMDs generally begin at age 73, or age 75 for people born in 1960 or later.
- Restricted stock units (RSUs)
- Restricted stock units are an employer’s promise to deliver company shares or cash after vesting conditions are met. Vesting commonly creates taxable compensation, and keeping the shares afterward adds a separate concentration decision.
- Retirement income planning
- Retirement income planning estimates how accounts, Social Security, pensions and taxable savings will pay household spending after paychecks stop. Ritholtz Wealth Management treats the withdrawal order as a tax and cash-flow question, not a guess based on whichever account is easiest to reach.
- Roth conversion strategy
- A Roth conversion strategy is a planned series of moves from a traditional retirement account to a Roth account, with ordinary income tax due on the converted amount. Ritholtz Wealth Management compares the current tax cost with later RMDs, Medicare premiums and estate choices before suggesting a conversion.
- Roth IRA
- A Roth IRA is an individual retirement account funded under Roth tax rules, where qualified withdrawals are generally tax-free. For 2026, direct contribution eligibility phases out at $153K–$168K for single filers and $242K–$252K for married couples filing jointly.
S
- Second-opinion plan review
- A second-opinion plan review is an independent review of an existing retirement or investment plan before you make a large, hard-to-reverse choice. Ritholtz Wealth Management uses it to test assumptions such as return estimates, stock concentration, withdrawal timing and taxes.
- Sequence-of-returns risk
- Sequence-of-returns risk is the danger that poor investment returns early in retirement damage a portfolio more when you are withdrawing from it. Two portfolios with the same average return can end with different values because their bad years arrived in different order.
- Social Security claiming
- Social Security claiming is the choice of when to begin retirement benefits and, for couples, how each spouse’s timing fits the household plan. For people born in 1960 or later, full retirement age is 67; claiming earlier generally means a smaller monthly benefit.
T
- Tax-efficient investing
- Tax-efficient investing places investments and realizes gains with an eye on the taxes created along the way. Ritholtz Wealth Management weighs fund turnover, account type and embedded gains before a change, because a cleaner-looking portfolio can carry a real tax cost.
- Tax-loss harvesting
- Tax-loss harvesting sells an investment in a taxable account at a loss so the loss may offset gains or income under tax rules. The replacement investment must preserve the portfolio’s intended exposure while avoiding a disallowed loss under the wash-sale rules.
- Taxable brokerage account
- A taxable brokerage account is an investment account without the contribution and withdrawal rules of an IRA or workplace plan. Interest, dividends and realized gains can create taxes as they occur, but withdrawals themselves are not automatically taxable.
- Thrift Savings Plan (TSP)
- The Thrift Savings Plan is the workplace retirement savings plan for federal employees and members of the uniformed services. Its 2026 employee deferral limit is $24,500, the same limit used for 401(k), 403(b) and governmental 457 plans.
- Traditional 401(k)
- A traditional 401(k) is a workplace retirement account where contributions generally reduce current taxable income and later withdrawals are generally taxable. It can be useful for high current earnings, but the future tax bill still belongs in the retirement calculation.
- Traditional IRA
- A traditional IRA is an individual retirement account that may allow a deduction for contributions, depending on income and workplace-plan coverage. Withdrawals are generally taxable, which makes the account’s future tax rate part of its real value.
- Trust
- A trust is a legal arrangement in which a trustee holds and administers property for named beneficiaries under written instructions. It can control how and when assets pass, but it does not automatically replace beneficiary designations or a will.
V
- Variable annuity
- A variable annuity is an insurance contract whose value usually changes with selected investment subaccounts and may offer insurance features for an added cost. It can defer taxes, but surrender charges, expenses and withdrawal terms deserve line-by-line review.
W
- Will
- A will is a legal paper that states who should receive property and who should manage the estate after death. It generally does not control assets with a named beneficiary, and state law affects what makes it valid.
- Withdrawal rate
- A withdrawal rate is the percentage of a portfolio taken out for spending during a year. Taking $48K from a $1.2M portfolio is a 4% first-year withdrawal rate; inflation, taxes and market losses can change the next year’s math.