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Investing

Individual Retirement Account (IRA)

An interest-earning retirement savings account in which the allowable contributions and earnings aren't taxed until the funds are withdrawn, after age 59 1/2.

Dollar-Cost Averaging

To invest, as in shares of stock, fixed amounts of money at regular intervals so as to buy more at lower prices ad less at higher prices

Due Diligence

A reasonable investigation of a proposed investment deal and of the principals offering it before the transaction is finalized to check out an investment's worthiness; generally performed by the investor's attorney and accountant.

Roth IRA

A personal retirement savings vehicle created by the Tax Payer Relief Act of 1997. A Roth IRA allows certain investors to make non-deductible contributions of up to $4,000 annually and, provided certain requirements are met, offers tax-free and penalty-free withdrawals for important financial needs in addition to retirement.

Savings Incentive Match Plan For Employees (S

An individual retirement account for owners of businesses with 100 employees or less that's similar to a 401(k)

Simplified Employee Pension Plan (SEP)

A retirement plan that allows you to contribute and deduct up to 20 percent of self-employment income (25 percent of salary if you're an employee of your own corporation)

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