Glossary

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• A-C

• D-F

• G-P

• Q-Z

• 0-9

A-C

Active Participant

An individual who, in a particular year, benefited under a qualified pension, profit sharing or stock bonus plan; a 403(b) plan; a SEP IRA; a 401(k); a qualified annuity; any plan described in IRC Sec 501(c)(18); or a plan established for its employees by the U.S., by a state or political subdivision or by an agency or instrumentality of the U.S. or a state or political subdivision (other than a plan under IRC Sec 457(b)).

Adjusted Gross Income (AGI)

All income received over the course of a year (wages, interest, dividends, capital gains, etc), after certain adjustments, including business expenses, alimony, moving expense, as specified on IRS Form 1040.

Annual Contribution Limits

The dollar amount that may be contributed personally (other than through a rollover or conversion) to an IRA for a year.

Carry-back Contribution

A contribution made to a Roth or Traditional IRA between January 1 and April 15 for the prior tax year.

Catch-up Contribution

An additional contribution available for individuals age 50 and older.

Co-mingling

Combining funds from different sources into one account or investment, for example, combing amounts rolled over from a qualified retirement plan and other IRA contributions in the same IRA.

Compensation

Amounts received for personal services, including base salary, commissions, bonuses, overtime and vacation pay. For self-employed individuals, compensation is net earnings from self-employment. For purposes of determining the annual contribution limits for an IRA, alimony and separate maintenance payments are treated as compensation.

Conduit IRA

An IRA that holds only amounts rolled over from a qualified retirement plan, 403(b) plan or similar plan, and earnings on those amounts.

Contingent Beneficiary

The individual(s) and or entity(ies) (e.g., trust, charity, estate) who will receive the proceeds of a retirement account upon the account owner's death if all Primary Beneficiaries are also deceased.

Contribution

An amount of personal funds contributed to an IRA for a particular tax year. Contributions (other than rollover contributions) must be made in cash or check and are subject to annual contribution limits depending on, among other things, the year and type of account.

Contributory IRA

An IRA that has been funded by cash contributions by the IRA owner, as opposed to funds received from a retirement plan or other IRA.

Conversion

The change of a traditional IRA, SEP or other IRA funded with pre-tax funds (or a portion of any such IRA) to a Roth IRA. A conversion is a taxable event.

Coverdell Educational Savings Account

A tax-favored account (formerly called an Education IRA) that is a trust or custodial account established in the United States funded with post-tax contributions to pay for the qualified education expenses of a designated beneficiary. Earnings and withdrawals from a Coverdell account are tax-free if used for those educational purposes. At the time of contributions, the designated beneficiary must be under age 18 or a special needs beneficiary.

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