On this episode of The Retirement Huddle podcast, Mark Howard breaks down some of the common acronyms in the financial world and what they mean.
ETF = Exchange Traded Fund
The market has boomed with these things since Covid-19, and you’ve got a new generation of investors using these in their index funds. The main selling points are low fees and less risky. It’s a basket of stocks and bonds.
RMD = Required Minimum Distribution
When you reach the age of 72, the government says you have to take a required minimum distribution from your qualified retirement account whether or not you need the money. You’ll have to take about a 4% withdrawal.
FRA = Full Retirement Age
Full retirement age is when you’re entitled to 100% of your Social Security benefits. It depends on the year you were born. They keep pushing it back. If you continue to delay taking your Social Security benefit, your benefit amount will increase about 8% each year.
Listen to the full episode or use the timestamps to jump to a specific section. Thanks for listening! We’ll be back for another show every other Thursday.
[1:28] – ETF
[2:46] – RMD
[5:23] – YTM
[5:57] – CPI
[8:02] – COLA
[9:33] – FRA