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The Securities and Exchange Commission (SEC) requires that all publicly traded companies file a Form 10-k every year. The filing date, ranging from 60 to 90 days after the end of a company's fiscal year, depends on the value of the publicly held shares.
The 10-k discloses detailed information about a company's finances, including total sales, sales by product line or division for the past five years, revenue, operating income, earnings per share, and equity, as well as other corporate information such as by-laws, organizational structure, holdings, subsidiaries, lawsuits in which the company is involved, and the company's history.
A company's Form 10-k becomes public information once it is filed, and you can find the report in the SEC's EDGAR database. As an investor, you can learn more about a company from its 10-k than from its less detailed annual report.
- Browse Related Terms: 10-k, 8-k, Acquisition, Audit committee, Closely held, Conglomerate, Depositary bank, Diluted earnings per share, Insider trading, Merger, Privatization, Retained earnings, Reverse stock split, Sarbanes-Oxley Act of 2002, Spin-off, Stock split
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A number of load and no-load mutual funds levy 12b-1 fees on the value of your mutual fund account to offset the fund's promotional and marketing expenses.
These asset-based fees, which get their name from the Securities and Exchange Commission (SEC) ruling that describes them, typically amount to somewhere between 0.5% and 1% annually of the net assets in the fund.
A fund that charges 12b-1 fees must detail those expenses, along with other fees it imposes, in its prospectus.
- Browse Related Terms: 12b-1 fee, Back-end load, breakpoint, Contingent deferred sales load, front-end load, Fund network, Level load, load, Load fund, Mutual Fund, No-load mutual fund, Redemption fee, Sales charge, Share class, Surrender fee
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You participate in a 401(k) retirement savings plan by deferring part of your salary into an account set up in your name. Any earnings in the account are federal income tax deferred.
If you change jobs, 401(k) plans are portable, which means that you can move your accumulated assets to a new employer's plan, if the plan allows transfers, or to a rollover IRA.
With a traditional 401(k), you defer pretax income, which reduces the income tax you owe in the year you made the contribution. You pay tax on all withdrawals at your regular rate.
With the newer Roth 401(k), which is offered in some but not all plans, you contribute after-tax income. Earnings accumulate tax deferred, but your withdrawals are completely tax free if your account has been open at least five years and you're at least 59 1/2.
In either type of 401(k), you can defer up to the federal cap, plus an annual catch-up contribution if you're 50 or older.
However, you may be able to contribute less than the cap if you're a highly compensated employee or if your employer limits contributions to a percentage of your salary. Your employer may match some or all of your contributions, based on the terms of the plan you participate in, but matching isn't required.
With a 401(k), you are responsible for making your own investment decisions by choosing from among investment alternatives offered by the plan. Those alternatives typically include separate accounts, mutual funds, annuities, fixed-income investments, and sometimes company stock.
You may owe an additional 10% federal tax penalty if you withdraw from a 401(k) before you reach 59 1/2. You must begin to take minimum required distributions by April 1 of the year following the year you turn 70 1/2 unless you're still working. But if you prefer, you can roll over your traditional 401(k) assets into a traditional IRA and your Roth 401(k) assets into a Roth IRA.
- Browse Related Terms: 401(k), 401(k) Plan, 403(b), 457, After-tax contribution, After-tax income, Automatic enrollment, CAP, Catch-up contribution, earned income, Employee stock ownership plan (ESOP), Excess contribution, Health Savings Account (HSA), High deductible health plan (HDHP), Highly compensated employees, Independent 401(k), Individual retirement account (IRA), Individual retirement annuity, individual retirement arrangement (IRA), Keogh plan, Matching contribution, Money purchase plan, Pretax contribution, Pretax income, Profit sharing, Recharacterization, Required beginning date (RBD), Roth 401(k), Roth IRA, Salary reduction plan, SIMPLE, Simplified employee pension plan (SEP), Tax-Deferred
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An employer-sponsored retirement plan that permits employees to divert part of their pay into the plan and avoid current taxes on that income. Money invested in the plan may be partially matched by the employer, and earnings accumulated tax-deferred until they're withdawn.
An arrangement in which an employee places pre-tax earnings, and sometimes matching employer contributions, into a tax deferred retirement account that the employer creates and maintains. The employer holds funds in trust until the employee reaches a specified age or leaves the company and rolls the account into another tax-deferred plan.
- Browse Related Terms: 401(k), 401(k) Plan, 403(b), 457, After-tax contribution, After-tax income, Automatic enrollment, CAP, Catch-up contribution, earned income, Employee stock ownership plan (ESOP), Excess contribution, Health Savings Account (HSA), High deductible health plan (HDHP), Highly compensated employees, Independent 401(k), Individual retirement account (IRA), Individual retirement annuity, individual retirement arrangement (IRA), Keogh plan, Matching contribution, Money purchase plan, Pretax contribution, Pretax income, Profit sharing, Recharacterization, Required beginning date (RBD), Roth 401(k), Roth IRA, Salary reduction plan, SIMPLE, Simplified employee pension plan (SEP), Tax-Deferred
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Tax-deferred savings plans, both of which are offered under the South Carolina Deferred Compensation Program . Both plans allow employees to set aside tax-deferred dollars from their pay and decide how to invest that money under the funds offered by the plans. The names "401(k)" and "457" come from the portion of the Internal Revenue Code from which these plans were created.
- Browse Related Terms: 401(k) Savings Plan and 457 Savings Plan, Average Final Compensation (AFC), Defined Contribution Plan, Direct Rollover, IRC Section 401(a), Lump-Sum Distribution, Qualified Domestic Relations Order (QDRO), Qualified Plan, Rollover, Roth 401(k) Savings Plan, Single-Sum Distribution, Tax-Deferred
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A 403(b) plan, sometimes known as a tax-sheltered annuity (TSA) or a tax-deferred annuity (TDA), is an employer sponsored retirement savings plan for employees of not-for-profit organizations, such as colleges, hospitals, foundations, and cultural institutions.
Some employers offer 403(b) plans as a supplement to - rather than a replacement for - defined benefit pensions. Others offer them as the organization's only retirement plan.
Your contributions to a traditional 403(b) are tax deductible, and any earnings are tax deferred. Contributions to a Roth 403(b) are made with after-tax dollars, but the withdrawals are tax free if the account has been open at least five years and you're 59 1/2 or older.
There's an annual contribution limit, but you can add an additional catch-up contribution if you're 50 or older.
With a 403(b), you are responsible for making your own investment decisions by choosing from among investment alternatives offered by the plan. You can roll over your assets to another employer's plan or an IRA when you leave your job, or to an IRA when you retire.
You may withdraw without penalty once you reach 59 1/2, or sometimes earlier if you retire. You must begin required withdrawals by April 1 of the year following the year you turn 70 1/2 unless you are still working. In that case, you can postpone withdrawals until April 1 following the year you retire.
- Browse Related Terms: 401(k), 401(k) Plan, 403(b), 457, After-tax contribution, After-tax income, Automatic enrollment, CAP, Catch-up contribution, earned income, Employee stock ownership plan (ESOP), Excess contribution, Health Savings Account (HSA), High deductible health plan (HDHP), Highly compensated employees, Independent 401(k), Individual retirement account (IRA), Individual retirement annuity, individual retirement arrangement (IRA), Keogh plan, Matching contribution, Money purchase plan, Pretax contribution, Pretax income, Profit sharing, Recharacterization, Required beginning date (RBD), Roth 401(k), Roth IRA, Salary reduction plan, SIMPLE, Simplified employee pension plan (SEP), Tax-Deferred
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An arrangement in which an employee places pre-tax earnings into a tax deferred retirement account that a state or local government employer or non-profit organization creates and maintains. Plans generally offer limited choices of funds in which to invest.
- Browse Related Terms: 403(b) Plan, Central Registration Depository (CRD), Conduit IRA, Funds Receivable, Guaranteed investment contract (GIC), IRA rollover, Plan administrator, Plan provider, Plan sponsor, Rollover, Rollover IRA, transfer
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These tax-deferred retirement savings plans are available to state and municipal employees.
Like 401(k) and 403(b) plans, the money you contribute and any earnings that accumulate in your name are not taxed until you withdraw the money, usually after retirement. The contribution levels are also the same, though 457s may allow larger catch-up contributions.
You also have the right to roll your plan assets over into another employer's plan, including a 401(k) or 403(b), or an individual retirement account (IRA) when you leave your job.
- Browse Related Terms: 401(k), 401(k) Plan, 403(b), 457, After-tax contribution, After-tax income, Automatic enrollment, CAP, Catch-up contribution, earned income, Employee stock ownership plan (ESOP), Excess contribution, Health Savings Account (HSA), High deductible health plan (HDHP), Highly compensated employees, Independent 401(k), Individual retirement account (IRA), Individual retirement annuity, individual retirement arrangement (IRA), Keogh plan, Matching contribution, Money purchase plan, Pretax contribution, Pretax income, Profit sharing, Recharacterization, Required beginning date (RBD), Roth 401(k), Roth IRA, Salary reduction plan, SIMPLE, Simplified employee pension plan (SEP), Tax-Deferred
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Each 529 college savings plan is sponsored by a particular state or group of states, and while each plan is a little different, they share many basic elements.
When you invest in a 529 savings plan, any earnings in your account accumulate tax free, and you can make federally tax-free withdrawals to pay for qualified educational expenses, such as college tuition, room and board, and books at any accredited college, university, vocational, or technical program in the United States and a number of institutions overseas.
Some states also exempt earnings from state income tax, and may offer additional advantages to state residents, such as tax deductions for contributions.
You must name a beneficiary when you open a 529 savings plan account, but you may change beneficiaries if you wish, as long as the new beneficiary is a member of the same extended family as the original beneficiary.
In most cases, you may choose any state's plan, even if neither you nor your beneficiary live in that state. There are no income limits restricting who can contribute to a plan, and the lifetime contributions are more than $300,000 in some states.
You can make a one-time contribution of $60,000 without incurring potential gift tax, provided you don't make another contribution for five years. Or, you may prefer to add smaller amounts, up to the annual gift exclusion.
- Browse Related Terms: 529 college savings plan, 529 Plan (Prepaid Tuition Plan), 529 prepaid tuition plan, Baccalaureate bond, Certificate of Accrual on Treasury Securities (CATS), CollegeSureî CD, Coverdell Education Savings Account, Early withdrawal, Education savings account (ESA), Hardship withdrawal, Hope scholarship credit, Investment horizon, Lifetime learning credit, Prepaid college savings plan, Prepaid college tuition plan, Tax-exempt
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An education savings account or plan operated by a state or educational institution designed to help families accrue funds for future college costs. There are two types of plans Prepaid Tuition Plans and Prepaid Savings Plans. See <##>Prepaid College Tuition Plan and <##>Prepaid College Savings Plan.
- Browse Related Terms: 529 college savings plan, 529 Plan (Prepaid Tuition Plan), 529 prepaid tuition plan, Baccalaureate bond, Certificate of Accrual on Treasury Securities (CATS), CollegeSureî CD, Coverdell Education Savings Account, Early withdrawal, Education savings account (ESA), Hardship withdrawal, Hope scholarship credit, Investment horizon, Lifetime learning credit, Prepaid college savings plan, Prepaid college tuition plan, Tax-exempt
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With a prepaid tuition plan, you purchase tuition credits at current rates to be used at some point in the future when your beneficiary attends one of the colleges or universities participating in the plan.
Most prepayment plans are sponsored by individual states and apply to the public institutions in the state, some state plans cover both public and private institutions in the state, and the Independent 529 plan includes more than 200 participating private institutions nationwide.
In the case of state plans, either you or your beneficiary may have to live the in the sponsoring state.
You owe no income tax on any appreciation in the value of the tuition credits if they are used to offset tuition, and you may be able to transfer the face value of the credits to a nonparticipating school if your child doesn't attend a participating one.
Some states and the Independent plan guarantee that your credits will cover the cost you prepay.
- Browse Related Terms: 529 college savings plan, 529 Plan (Prepaid Tuition Plan), 529 prepaid tuition plan, Baccalaureate bond, Certificate of Accrual on Treasury Securities (CATS), CollegeSureî CD, Coverdell Education Savings Account, Early withdrawal, Education savings account (ESA), Hardship withdrawal, Hope scholarship credit, Investment horizon, Lifetime learning credit, Prepaid college savings plan, Prepaid college tuition plan, Tax-exempt
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The Securities and Exchange Commission (SEC) requires that all publicly traded companies use Form 8-k to report anything that could have a significant effect on the financial position of the company or the value of its shares.
Events and changes that must be reported - in most cases within four days - include bankruptcy, mergers, acquisitions, amendments to the corporate charter or by-laws, a change of directors, a change in the fiscal year, and even a change of name or address of the company.
A company's Form 8-k becomes public information once it is filed, and you can find the report in the SEC's EDGAR database. These 8-k filings are designed to level the playing field between general investors and investors who have special access to information about a company.
- Browse Related Terms: 10-k, 8-k, Acquisition, Audit committee, Closely held, Conglomerate, Depositary bank, Diluted earnings per share, Insider trading, Merger, Privatization, Retained earnings, Reverse stock split, Sarbanes-Oxley Act of 2002, Spin-off, Stock split
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A concept of tax fairness that states that people with different amounts of wealth or different amounts of income should pay tax at different rates. Wealth includes assets such as houses, cars, stocks, bonds, and savings accounts. Income includes wages, interest and dividends, and other payments.
- Browse Related Terms: ability to pay, benefits received, Earned Income Credit (EIC), financial records, Gross Income, horizontal equity, underground economy, vertical equity
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If your life insurance policy has an accelerated death benefit (ADB), you may qualify to use a portion of the death benefit to pay for certain healthcare expenses, such as the costs of a terminal illness or long-term care, while you're still alive.
Using the ADB, you take cash advances from the policy, reducing the death benefit by up to a fixed percentage. The balance is paid to your beneficiaries on your death.
While an accelerated death benefit can help ease current financial burdens, including this option in your policy increases the cost of coverage. And, if you do take money out, it reduces what your beneficiaries receive.
- Browse Related Terms: Accelerated death benefit, Asset, Cash surrender value, Cash value account, Credit Life Insurance (CLI), Death benefit, Decreasing term insurance, Depreciation, Face value, Insurance trust, Life settlement, Lump sum, Pension maximization, Permanent insurance, Straight life, Survivorship life, Universal life insurance, Viatical settlement, Whole life insurance
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An agreement that defines membership eligibility and conditions of your share accounts. It also defines many other important banking operations such as how to order a stop payment on share drafts, transaction limitations on your accounts, overdrafts fees, and what happens if your account becomes dormant. The agreement may disclose if the credit union has a security interest if your loan becomes delinquent or your share account becomes negative. The agreement also discloses if the credit union has a cross collateralization clause for your automobile, for example, it can hold the automobile for security for other loans you have with the credit union.
- Browse Related Terms: Account Agreement, Checking Account (Share Draft Account), Credit card issuer, Credit Union, Credit Union Statement, Dividends, Drawee, Drawee Institution, Financial Performance Report (FPR), Furnisher, Index-linked Share Certificate (SC), Peer Average Ratio, Percentile Rankings, Personal Savings Account, Share Account, Share Certificate, Share Draft Account, Wire transfer
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Your account balance is the amount of money you have in one of your financial accounts. For example, your bank account balance refers to the amount of money in your bank accounts.
Your account balance can also be the amount of money outstanding on one of your financial accounts. Your credit card balance, for example, refers to the amount of money you owe a credit card company.
With your 401(k), your account balance, also called your accrued benefit, is the amount your 401(k) account is worth on a date that it's valued. For example, if the value of your account on December 31 is $250,000, that's your account balance.
You use your 401(k) account balance to figure how much you must withdraw from your plan each year, once you start taking required distributions after you turn 70 1/2. Specifically, you divide the account balance at the end of your plan's fiscal year by a divisor based on your life expectancy to determine the amount you must take during the next fiscal year.
- Browse Related Terms: Account balance, Accumulation period, Accumulation unit, Annuitant, Annuitization, Annuitize, Annuity, Annuity principal, Deferred annuity, Fixed annuity, Hybrid annuity, Immediate annuity, Income annuity, Life expectancy, Lump-Sum Distribution, Minimum required distribution (MRD), Nonqualified annuity, Split-funded annuity, Systematic withdrawal, Variable annuity, Withdrawal
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The history of an account over a specific period of time for either shares or loans.
- Browse Related Terms: Account History, Appraisal, Average daily balance, Billing Date, Cash basis accounting, Cash Flow, Credit History, Credit Repair Organization, Grace Period, Minimum finance charge, Periodic rate
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All persons designated and authorized to transact business on behalf of an account. Each account holder's signature needs to be on file with the credit union. The signature authorizes that person to conduct business on behalf of the account without the other account holders consent.
- Browse Related Terms: Account holder, ATM surcharge, Canceled Check (Share Draft), Check Deposit Return, Early Withdrawal Penalty, fee, Fee Charged for Use of Other ATM, Fee Charged for Use of Your Own ATM, Minimum Balance Required, Money Order Fee, Monthly or Annual Fee, Overdraft Fee, Overdraft Protection, Per Check Fee (If Minimum Balance is Not Maintained), Per Check Fee (If Minimum Balance Maintained), Service Fee Per Month
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An accredited investor is a person or institution that the Securities and Exchange Commission (SEC) defines as being qualified to invest in unregistered securities, such as privately held corporations, private equity investments, and hedge funds.
The qualification is based on the value of the investor's assets, or in the case of an individual, annual income.
Specifically, to be an accredited investor you must have a net worth of at least $1 million or a current annual income of at least $200,000 with the anticipation you'll earn at least that much next year. If you're married, that amount is increased to $300,000.
Institutions are required to have assets worth $5 million to qualify as accredited investors. The underlying principal is that investors with these assets have the sophistication to understand the risks involved in the investment and can afford to lose the money should the investment fail.
- Browse Related Terms: Accredited investor, Appreciation, Boiler room, Capital preservation, churning, Collectible, Financial pyramid, Formula investing, Haircut, Indexed annuity, Inflation-adjusted return, opportunity cost, Real interest rate, Risk, Risk Tolerance, Time value of money
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Interest that has been earned, but not yet paid, to the account holder for a share account; or interest due, but not yet paid by a borrower on a loan.
Accrued interest is the interest that accumulates on a fixed-income security between one interest payment and the next.
The amount is calculated by multiplying the coupon rate, also called the nominal interest rate, times the number of days since the previous interest payment.
Interest on most bonds and fixed-income securities is paid twice a year. On corporate and municipal bonds, interest is calculated on 30-day months and a 360-day year. For government bonds, interest is calculated on actual days and a 365-day year.
When you buy a bond or other fixed-income security, you pay the bond's price plus the accrued interest and receive the full amount of the next interest payment, which reimburses you for the accrued interest payment you made when you purchased the bond. Similarly, when you sell a bond, you receive the price of the bond, plus the amount of interest that has accrued since you received the last interest payment.
On a zero-coupon bond, interest accrues over the term of the bond but is paid in a lump sum when you redeem the bond for face value. However, unless you hold the bond in a tax-deferred or tax-exempt account, you owe income tax each year on the amount of interest that the government calculates you would have received, had it been paid.
- Browse Related Terms: accrued interest, Bonds (Corporate), Coupon Rate, Debt, Full faith and credit, General obligation (GO) bond, Insured bond, Senior bond, Treasuries
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