Skip to Main Content

Start Of Main Content

Financial jargon simplified: retirement

Doing some homework early on to understand important jargon can help you feel ahead of the game.

Financial jargon can be confusing to navigate, for both the ‘new-to-managing-my-finances', and even those who are more experienced at it. If you've ever felt like you need a healthy dose of ‘just the facts', you're in luck.

It's time to feel empowered to own your financial conversations. Brushing up on these terms can help you make more informed, confident decisions in your financial life - ultimately getting you to your goals faster and smarter.

You know what sounds better than being retired at 65 sitting on a beach? Being retired at 55 sitting on a beach. So how do you get there? A starting place is to save for retirement today, no matter how small.

Starting to save sooner than later is key as you're building a foundation for financial security and freedom in your older years. If you start saving young, compound interest may help your money grow over time. That's why the best time to start saving for retirement is ASAP with an amount you feel comfortable with, even if you start by saving just a little.

Regardless of the type of retirement account you choose or have available to you, as you get started on your path toward saving you'll want to know these terms and the different types of retirement plans and accounts available so you can make the most informed decisions possible.

Financial Jargon - Retirement infographic

Jargon Simplified: Retirement

  • 401(k): Retirement plan offered by businesses.
  • 403(b): Retirement plan offered by nonprofits or public organizations.
  • 457: Retirement plan offered by local governmental agencies.
  • IRA: (Individual Retirement Account) - a personal retirement account you can contribute to every year you've earned income. Roth: Pay taxes today. Contributions made to any of the four above accounts are on an after-tax basis, which means you pay taxes on money you contribute today, but generally don't pay tax on the money you withdraw later.
  • Traditional: Pay taxes with you withdraw. Contributions made to any of the four above accounts are on a pre-tax basis, which means you generally pay no taxes on the money you contribute now, but you do pay taxes when you withdraw money in retirement. Next Door® inspired by State Farm®.

Next Door® inspired by State Farm®.


What Now?

Already saving? Review your accounts and make sure you are feeling confident in your savings plan. Otherwise, decide what accounts make sense for you and take the first step towards saving for your future today.

Most importantly, start (and keep) saving ASAP - no matter how much. Even a little bit can make an impact on your retirement. Ready to get real savvy with the numbers? Check out these retirement calculators.

What is Financial Friday?

Financial Friday is a series dedicated to financial education and actionable tips meant to inspire progress toward your financial well-being. Subscribe to Next Door® to get Financial Friday articles delivered to your inbox.

Subscribe to Next Door®

Select a product to start a quote.




844-373-0003

Also Important

Financial Jargon Simplified: Credit

Financial Jargon Simplified: Credit

Doing some homework to understand important jargon can help you navigate credit with confidence.

Real People, Real Dollars

Real People, Real Dollars

Questions, issues and stumbles related to money and budgets are often measured by one challenge at a time: saving for a house, paying off a credit card, even establishing an emergency fund.

Related Articles

Financial Jargon Simplified: Investing

Financial Jargon Simplified: Investing

Doing some homework to understand important jargon can help you navigate investing with confidence.

Financial Jargon Simplified: Insurance Basics

Financial Jargon Simplified: Insurance Basics

Doing some homework to understand important jargon can help you navigate insurance with confidence.

Financial Jargon Simplified: Health Insurance

Financial Jargon Simplified: Health Insurance

Doing some homework to understand important jargon can help you navigate insurance with confidence.