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The Vocabulary:

401(k) – Employer-sponsored retirement savings accounts that offer tax benefits (meaning that you pay less in taxes by saving your money in them)
Compound interest – Interest that is calculated and paid on both the initial principal and the accumulated interest
Emergency fund – Money saved to help cover unexpected expenses
Employee contributions – Money contributed by an employee to an employer-sponsored retirement plan such as a 401(k) or a pension
Employer match – Money an employer contributes to an employee’s retirement savings plan when the employee also contributes
Individual retirement account (IRA) – Tax-advantaged retirement savings accounts that are established by individuals rather than employers
Investing – Putting money into an asset (such as a stock, bond, or mutual fund) with the expectation that it will grow over time, but with the risk that it will not
Long-term care – A variety of services that help meet both the medical and non-medical needs of people with a chronic illness or disability who cannot care for themselves for long periods; these services are not covered by Medicare
Medicare – The federal health insurance program for people age 65 and older and some people with disabilities
Pay Yourself First – The idea that consumers should routinely and automatically put money into savings before spending on anything else
Pension – Employer-sponsored retirement plans that guarantee a certain monthly benefit for life
Retirement planning – The process of determining retirement income goals and establishing a plan to meet them. This includes estimating expenses, saving money, and deciding how to invest your savings
Saving – Setting aside income or money for future spending
Social Security Disability Insurance (SSDI) – A part of the Social Security program that pays monthly benefits to eligible workers under the age of 65 who cannot work because they have a qualifying severe disability
Social Security – A long-standing federal insurance program to provide benefits to older adults, their survivors, and workers who become disabled