Retirement Planning Glossary
The vocabulary of retirement income planning, defined in plain language, with what each term means for a household two to eight years from retirement.
IRMAA (Income-Related Monthly Adjustment Amount)
IRMAA is a Medicare premium surcharge on Part B and Part D for beneficiaries whose income two years earlier crossed a threshold, and it can add hundreds of dollars a month per person.
NQDC (Non-Qualified Deferred Compensation)
NQDC lets executives defer part of their pay to a future date, but Social Security and Medicare taxes apply when the pay is deferred or vests, income tax applies when it is paid out, and the balance stays exposed to employer creditor risk.
Provisional Income
Provisional income is the IRS formula, adjusted gross income plus tax-exempt interest plus half of Social Security, that decides how much of your Social Security benefit gets taxed.
QCD (Qualified Charitable Distribution)
A QCD sends money directly from an IRA to a public charity at age 70½ or older, counts toward your RMD, and is excluded from taxable income entirely, unlike a regular itemized deduction.
Retirement Income Planning
Retirement income planning coordinates withdrawal order, Social Security timing, Roth conversions, tax bracket management, and Medicare premiums into one income strategy, rather than five separate decisions.
Retirement Income Roadmap
A Retirement Income Roadmap is a written plan integrating withdrawal order, tax strategy, Social Security timing, health care, and legacy goals into one coordinated document for both spouses.
RMDs (Required Minimum Distributions)
RMDs are mandatory annual withdrawals the IRS requires from traditional 401(k) and IRA accounts starting at 73, or 75 if you were born in 1960 or later, taxed as ordinary income whether or not you need the money that year.
Roth Conversion Strategy
A Roth conversion strategy moves money from a traditional 401(k) or IRA into a Roth account over several years, paying tax now at a chosen rate instead of a forced rate later, so the money grows and comes out tax-free.
Sequence of Returns Risk
Sequence of returns risk is the danger that a market decline in retirement’s early years shrinks a portfolio for good, even if the average return over the full retirement looks fine.
Withdrawal Sequencing
Withdrawal sequencing is the order in which you draw from taxable, tax-deferred, and Roth accounts each year, chosen to manage your tax bracket instead of draining accounts in a fixed, default order.
Every term here shows up in a real planning decision. The guides show how they interact.
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