Financial Advice for Retirement, Social Security, IRAs and Estate Planning

IRA-Related Acronyms: Appendix

February 5, 2018
By Bruce Miller
Acronyms

 

Our lives seem to have too many acronyms or short abbreviations. Unless you see them and use them all the time, we tend to forget what they mean.

Personal finance is no exception and there are lots of acronyms. As someone who has been a Certified Financial Planner™ for many years, it is easy for me to fall back into my favorite acronyms without bothering to explain what they represent.

However, most IRA owners are not financial professionals and do not encounter these acronyms regularly. Therefore, I have collected a list of the most common acronyms used in my IRA Quick Reference Guide series. I tried to keep the list to a minimum and the list below is by no means a complete list of acronyms relevant to IRA investing.

 Acronyms

 72(t):  This is the section of the Internal Revenue Code, often referred to as “Substantially Equal Periodic Payments” that can be used to avoid the 10% penalty if the IRA owner needs to begin withdrawals from his or her Traditional IRA (TIRA) prior to age 59.5.

 AGI:  Adjusted Gross Income

ERISA:  The Employee Retirement Income Security Act of 1974, which places strict rules on employer sponsored retirement plans, generally does not affect IRAs.

HOH: Head of Household

IRA:  Individual Retirement Arrangement, or more often, Individual Retirement Account

IRD: Income in Respect of Decedent. A tax deduction to IRA beneficiaries if estate tax was paid by the decedent who owned the inherited IRA.

IRS: Internal Revenue Service. Issues all rules for IRAs through Publications

MAGI: Modified Adjusted Gross Income

MFJ: Married Filing Jointly for tax filing.

MFS: Married Filing Separately

MLP: Master Limited Partnership. An investment unique in their ability to produce income in an IRA that may be taxable to the IRA as Unrelated Business Taxable Income

MYRA:  An IRA set up with the U.S. Department of Treasury and contributed to by payroll deduction. This has been discontinued in 2018.

RBD: Required Beginning Date. This is defined as being April 1 of the year following the year one attains age 70.5.

REIT: Real Estate Investment Trust

IRA: Roth IRA

RMD: Required Minimum Distribution. This is defined as the MINIMUM amount that must be withdrawn in a given year.

SARSEP: Salary Reduction SEP through employer. No new plans after 1996 but existing plans grandfathered.

SEP: Simplified Employee Pension. A SEP is a self-employed individual or employer established retirement plan, which allows the self-employed individual or the employer a tax deduction for contributions made to the SEP plan and makes contributions to each eligible employee’s SEP IRA. The decision to make or not make a SEP IRA contribution to employees is discretionary to the employer.

SIMPLE IRA: An employer sponsored retirement plan where contributions are made by an employee through elective salary reduction and must be matched by the employer. These may also be used by the self-employed.

SIRA: SEP IRA, whose contributions are made by an employer or through self employment

TIRA:  Traditional IRA

 


Bruce Miller

 

 

Bruce Miller is a certified financial planner (CFP) who also is the author of Retirement Investing for INCOME ONLY: How to invest for reliable income in Retirement ONLY from Dividends and  IRA Quick Reference Guide.

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