4
- 401(h) Account
- A medical-expense subaccount inside a defined benefit plan that funds tax-free retiree healthcare. Powerful for business-owner plans. Learn more →
- 412(e)(3) Plan
- A fully insured defined benefit plan funded with annuities and life insurance, offering guaranteed benefits and very large deductible contributions. Learn more →
A
- AMT(Alternative Minimum Tax)
- A parallel federal income tax that limits the benefit of certain deductions and preferences. Most relevant in equity-comp years involving ISO exercises. Learn more →
- AUM(Assets Under Management)
- The total client assets a firm manages, typically used as the basis for advisory fees (0.50%–1.25% per year is common at independent fiduciary RIAs). Learn more →
- Asset Location
- Placing tax-inefficient assets (taxable bonds, REITs) in tax-deferred accounts and tax-efficient assets (broad-market equities) in taxable accounts to raise after-tax return. Learn more →
B
- Backdoor Roth
- A non-deductible Traditional IRA contribution converted to a Roth IRA, used by high earners whose income exceeds direct Roth contribution limits. Learn more →
- Bond Tent
- A temporary increase in bond allocation around the retirement date that 'tents' down again over the first 10 years of retirement, reducing sequence-of-returns risk. Learn more →
C
- Capital Gains
- Profit on the sale of an investment. Long-term gains (held >1 year) are taxed at preferential federal rates of 0%, 15%, or 20% plus possible NIIT. Learn more →
- Cash Balance Plan
- A defined benefit retirement plan that looks like a 401(k) on paper but allows much larger annual contributions — often $100K–$300K+ for older business owners. Learn more →
- CFA(Chartered Financial Analyst)
- Investment-analysis credential issued by the CFA Institute after three exams. Strongest credential for portfolio management and security analysis. Learn more →
- CFP(Certified Financial Planner)
- Comprehensive household-planning credential from the CFP Board. CFP professionals are required to act as fiduciaries when giving financial advice. Learn more →
- Concentration Risk
- The risk created when a single security or sector makes up an outsized share of net worth — common after IPOs, vesting events, or long company-stock tenures. Learn more →
- CPA / PFS(Certified Public Accountant / Personal Financial Specialist)
- CPA is the state license for accounting and tax. PFS is the AICPA personal-finance specialty add-on. Strongest credential for tax-heavy planning. Learn more →
D
- Designer DB Plus®
- WPA's proprietary stacked-plan retirement strategy combining a defined benefit plan with a profit-sharing 401(k) for maximum tax-deductible business-owner contributions. Learn more →
- Donor-Advised Fund (DAF)
- A charitable account that lets you take an immediate income-tax deduction for a contribution and grant the assets to charities over future years — useful for bunching deductions in high-income years. Learn more →
E
- Equity Compensation
- Stock-based pay including RSUs, NQSOs, ISOs, ESPPs, and founder stock. Interacts with AMT, capital gains, concentration risk, and 10b5-1 trading windows. Learn more →
- ESPP(Employee Stock Purchase Plan)
- A program letting employees buy company stock at a discount (typically up to 15%), often with a lookback feature. Learn more →
F
- Fee-Only
- An advisor compensation model in which the advisor is paid only by the client — no commissions, 12b-1 fees, or product revenue. Distinct from 'fee-based', which includes commissions. Learn more →
- Fiduciary
- Legally required to put your interests ahead of their own at all times. Registered Investment Advisers are held to this standard; broker-dealers are held to a lower 'best interest' standard. Learn more →
G
- Glidepath
- A pre-set schedule that gradually shifts a portfolio's allocation — typically from equities toward bonds — as a target date approaches. Learn more →
H
- HSA(Health Savings Account)
- The only U.S. account with a triple tax benefit — deductible contributions, tax-deferred growth, and tax-free withdrawals for qualified medical expenses. Functions like a Traditional IRA for non-medical spending after 65. Learn more →
I
- IRMAA(Income-Related Monthly Adjustment Amount)
- A surcharge on Medicare Part B and Part D premiums for higher-income retirees. Calculated from MAGI two years prior; structured as cliffs, not phase-ins. Learn more →
- ISO(Incentive Stock Option)
- An employee stock option with preferential tax treatment if holding-period rules are met. Exercise can create AMT exposure. Learn more →
N
- NQSO(Non-Qualified Stock Option)
- A stock option taxed as ordinary income on the spread at exercise. Simpler than ISOs but no AMT-favored treatment. Learn more →
P
- Pre-Exit Planning
- Tax, charitable, and trust structuring done in the 12–24 months before a business sale to optimize after-tax proceeds. Largely irreversible once the deal closes. Learn more →
- Profit Sharing
- An employer retirement-plan contribution made at the company's discretion, typically layered on top of a 401(k) — can lift total annual contributions to $69K+ (2024 limit). Learn more →
Q
- QSBS(Qualified Small Business Stock (§1202))
- Founder/early-investor stock that can qualify for federal capital-gains exclusion of up to the greater of $10M or 10× basis, with OBBBA-era expansions in 2025. Learn more →
- QSBS Stacking
- Gifting QSBS shares into multiple non-grantor trusts before sale so each trust receives its own §1202 exclusion, multiplying total tax-free gain. Learn more →
R
- RIA(Registered Investment Adviser)
- A firm registered with the SEC or a state regulator that provides investment advice for compensation and is held to a fiduciary standard at all times. Learn more →
- RMD(Required Minimum Distribution)
- Mandatory annual withdrawal from most tax-deferred retirement accounts beginning at age 73 (SECURE 2.0). Failure to take RMDs triggers a 25% excise tax. Learn more →
- Roth Conversion
- Moving pre-tax retirement assets to a Roth IRA, paying ordinary income tax now in exchange for tax-free growth and tax-free withdrawals later. Learn more →
- Roth Conversion Ladder
- A multi-year sequence of partial conversions sized to fill specific tax brackets — usually between retirement and the start of RMDs at 73. Learn more →
- RSU(Restricted Stock Unit)
- A grant of company shares that vests over time. Taxed as ordinary income at vesting based on the share price that day. Learn more →
S
- SEP-IRA(Simplified Employee Pension IRA)
- A retirement plan for self-employed individuals and small business owners with high contribution limits and minimal administrative burden. Learn more →
- Sequence-of-Returns Risk
- The risk that poor investment returns early in retirement permanently impair a portfolio's ability to last — even if average returns over retirement are acceptable. Learn more →
- Stretch IRA / 10-Year Rule
- Most non-spouse beneficiaries of IRAs must fully drain the account within 10 years of the original owner's death (SECURE Act), replacing the prior lifetime-stretch rules. Learn more →
W
- Wirehouse
- A large national broker-dealer (e.g., Morgan Stanley, Merrill Lynch, UBS, Wells Fargo) whose advisors typically operate under a hybrid fee-and-commission model. Learn more →
Educational only. Definitions are simplified and do not substitute for personalized fiduciary, tax, or legal advice. See the Insights library for deeper treatments.