15 Year Catch-up Provision
When permitted by a 403(b) plan, this provision may allow an employee having 15 years of service with a qualified organization (an educational organization, hospital, home health service agency, health and welfare service agency, church or convention or association of churches), to make deferral contributions in excess of the plan’s deferral limit and certain other legal limits.
90-24 Transfer
For 403(b) plans, this is a tax-free direct transfer of assets from one investment provider to another investment provider. Such transfers are not treated as distributions or as “deemed distributions.”
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Accrued Benefit
Under a defined benefit plan, the Accrued Benefit represents that portion of your benefit that has accrued to a specific date based on the provisions of your plan. Examples of plan provisions that may be considered could be your earnings and service history, age, expected Social Security benefit, etc. Please refer to your own plan's summary for specific information. The amount quoted is a monthly annuity payable on the plan's Normal Annuity Form commencing at your Normal Annuity Commencement Date (Normal Retirement Date).
Actuarial Equivalency
Factors that are used to modify your annuity payment so that the total value of your plan benefits are maintained despite an optional benefit commencement date or annuity form that may be selected. The factors generally take into account the ages of you and your spouse, as well as expected investment returns over the annuity payout period.
Age 50 Catch-up Rule
This rule allows an additional amount (up to $6,000 for 2018) to be deferred to the plan in excess of the plan’s deferral limit or certain other legal limits by participants who will be age 50 (or older) by the end of the year.
Annuity
An annuity is a contractual financial product that is designed to accept and grow funds from an individual and then pay out the fund on a regular basis over a fixed period of time or for the recipient's lifetime. There are many different types of annuities, some of which offer the continuation of benefits to your beneficiary after your death.
Annuity Commencement Date
The date when your accrued benefit payments will commence. Often times, this is referred to as your retirement date.
Asset Allocation
Asset Allocation is an investment strategy that divides investments among different asset categories, such as cash, bond or stock investments. This strategy attempts to balance risk versus reward by adjusting the percentage of each asset in an investment portfolio according to an investor’s risk tolerance, goals and investment timeframe.
Average Earnings
Typically used in a defined benefit plan, average earnings refers to the average of your eligible earnings (your pay) over a certain number of years. Your average earnings may be one of the factors used in determining the amount of your benefits.
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Bear Market
A prolonged period in which securities and/or stock prices are declining or have fallen 20% or more.
Beneficiary
A person or persons you designated to receive any benefits payable upon your death.
Benefit Formula
The formula used by a defined benefit plan that determines the amount of the benefit that will be paid to you.
Bond
A bond is an IOU that promises to pay the investor a fixed return, usually within established time periods. Some bonds pay periodic interest and then repay the principal amount at maturity. Other bonds are issued at a “discount” (for less than) face value and pay no periodic interest; the bond will be redeemed for its face amount upon maturity where the face amount returns the principal amount and includes accrued, but previously unpaid, interest.
Bull Market
A prolonged period in which prices of securities and/or stocks are rising.
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Convertible Bond
Sometimes called "convertibles," corporate bonds that can be exchanged for a predetermined quantity of a different security (typically common stock) at a present price. Convertibles are attractive to investors who want the income potential of bonds and the appreciation potential of common stocks.
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Defined Benefit Plan
Defined benefit plans promise participants a monthly retirement benefit typically based on the participant’s years of service, compensation and age. Some plans allow participants to receive a single-sum payment upon retirement instead of the monthly payments. These benefits, which are promised by the employer sponsoring the plan, also are insured by a government agency - the Pension Benefit Guaranty Corporation (PBGC).
Defined Contribution Plan
Defined contribution Plans, such as 401(k) plans, may receive periodic contributions from the employer and/or the employee. Defined contribution plans typically pay retirement or termination benefits in a single-sum payment, though many also allow installments or periodic payments. Some also allow participants to receive a portion of their account while actively employed if the participant meets certain conditions. The amount the participant ultimately receives is based on contributions to his or her account and accrued investment income. Unlike defined benefit plans, these benefits are not insured by the PBGC.
Diversification
Diversification is a way of attempting to reduce investment risk by putting money in different types of investments. It does not ensure a profit or protect against loss.
Dividends
A type of income, typically paid by stock investments and some mutual funds. Mutual funds pass dividends on to their shareholders. Tax deferred retirement plans reinvest dividends.
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Early Annuity Commencement Date
This date is often referred to as an early retirement date. You must be eligible to choose to receive your accrued benefit on this date, which may be based on age and service requirements of your plan. The benefit paid on this retirement date may be reduced. The reduction takes into consideration that you will generally receive the annuity over a longer period of time than if you waited until your normal retirement date. As a general rule, early retirement will give you about the same total benefits over your lifetime, but in smaller amounts to take into account the longer period you will receive them. Once you've become eligible for early retirement, you may choose to retire at any date on or following this date.
Estimated Increase in Annual Earnings
An estimate of how much your pay will increase each year in the future.
Estimated Social Security Benefit
The estimated monthly benefit payable by the Social Security Administration at your retirement date. The estimated benefit calculated makes assumptions about your prior and future earnings. The Social Security Administration will use your actual past earnings when determining the exact benefit amount.
Estimated Termination Benefit
The estimated termination benefit represents that portion of your benefit that has accrued to a specific future date based on the provisions of your plan. This benefit assumes that you continue to work to the date entered. The amount quoted is the monthly annuity payable on the plan's Normal Annuity Form commencing at your Normal Annuity Commencement Date. Please refer to your plan's provisions for specific information concerning the calculation of benefits.
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Inflation
Inflation is the rise in the price of goods and services.
IRA
Acronym for "Individual Retirement Account", an IRA allows an individual to set aside income up to a specified amount each year (based upon current IRS limits). There are several types of IRA's. Contributions to a Roth IRA are made after paying taxes on them, but earnings grow tax-deferred; these earnings may be tax exempt when withdrawn under certain conditions. A traditional IRA accepts contributions on a pre-tax basis; the contributions and earnings are tax deferred until they’re withdrawn. Federal law may restrict the ability of a taxpayer to contribute to an IRA based on their income and other factors. Generally, money cannot be withdrawn from an IRA until the individual attains age 59-1/2. The SEP (simplified employment pension) IRA is for self employed individuals and defers tax on contributions.
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Joint Annuitant
The person you designate when you elect retirement who will continue to receive annuity payments for life in the same or reduced amount, upon your death. This situation is only applicable if the annuity form chosen is Joint and Survivor. Some Joint and Survivor annuity forms also reduce the amount paid to you at the death of your Joint Annuitant. Spousal consent may be required if you name a Joint Annuitant other than your spouse.
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Married
Typically refers to a participant who has been married throughout the one year period immediately preceding the date benefits are calculated for a death benefit paid prior to retirement.
Matching Contributions
Some employers “match” a portion of the contributions employees make to a defined contribution plan. To receive the matching contribution, the participant must contribute to the plan. Not all plans offer a matching contribution and among those who do, the match may be fixed or vary from year to year. Some plans apply a vesting schedule to these contributions.
Money Purchase Pension Plan
A tax deferred retirement plan in which the employer contributes a fixed annual amount on behalf of each participant. This contribution may be subject to a vesting schedule. Some of these plans also allow an employee to contribute money on an after-tax basis.
Mutual Fund
A mutual fund is an investment vehicle that is formed when an investment company pools money from shareholders and invests it. Investments can include stocks, bonds, money market instruments and other assets. Mutual funds are operated by professional money managers.
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Normal Annuity Commencement Date
This date is often referred to as your normal retirement date as described by your plan. You are entitled to 100% of your accrued benefit on this date with payments commencing immediately upon your retirement from the plan.
Normal Annuity Form
The basic way of paying retirement income to you according to the terms of the plan. This standard method of payment is automatically in effect unless you choose an optional manner of receiving your retirement income. If you are married, in order to receive your benefits on the normal annuity form, your spouse must agree in writing.
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On-Demand Rebalancing
In a defined contribution plan, on-demand rebalancing realigns the percentage of your total account balance that is invested in each of the plan’s investments based on the target investment allocation percentage that you have chosen for that account. On-demand rebalancing is done on a one-time only basis and will not occur again unless you select it again.
Optional Annuity Form
An alternate method of receiving retirement income designed to fulfill different financial needs or personal situations. You must make this election prior to retirement and it is subject to the terms of the plan.
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Participation Date
The date you become eligible for coverage under a plan.
Pension Plan
A qualified retirement plan set up by an employer for its employees. This term most frequently refers to a defined benefit plan as defined earlier in this Glossary.
Plan
The legal document that describes the rules governing your eligibility dates and benefit entitlements with respect to the pension provided by your employer.
Plan Year
The period defined in the plan for record keeping purposes. A plan year is normally a twelve-month period but it is possible to have a “short plan year” that is less than twelve months; however, a plan cannot have two short plan years in a row. A plan year can be a calendar year, the employer's tax or fiscal year or the anniversary of effective date of the plan.
Portfolio
A portfolio is all of the different investments made by a given individual or institution.
Profit Sharing Plan
A defined contribution plan to which an employer contributes money, usually a portion of the Company's profits, to accounts for its employees.
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Qualified Retirement Plan
A retirement plan that receives special tax treatment because it meets certain Internal Revenue Code requirements is referred to as a qualified retirement plan.
Qualified Spousal Joint and Survivor Annuity
This is the default method of receiving retirement annuity payments for a married participant under a defined benefit plan (unless you and your spouse choose otherwise). The payment amount will be less than the amount paid under a single life annuity since at your death, your spouse as joint annuitant will receive payments as long as he or she lives. These payments to your spouse will equal at least 50% of the amount you were receiving.
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Rate of Return
The rate of return is the gain or loss on an investment over a specified time period, expressed as a percentage of the investment’s cost.
Rebalancing
To help you maintain your investment portfolio over time, your account can be periodically rebalanced. This ensures that the percentage of your total account balance in each investment corresponds to your intended allocation. This is important since gains and losses in different investments may change the percentage of your total account balance that is invested in each investment option. Rebalancing doesn’t ensure a profit or protect against loss.
Retirement
The start of an immediate annuity pension payment on account of age and/or service as defined under your plan.
Retirement Date
The date on which retirement income payments begin under a plan.
Retirement Plan
An agreement between the employer and its employees to provide their retirement benefits.
Risk Tolerance
Risk Tolerance is the degree to which an investor is willing to take risk in the hopes of a certain level of returns.
Rollover
A rollover is the tax-free movement of an amount from one plan to another.
Roth Start Date
The first taxable year for which an individual made a designated Roth contribution to his/her Roth account under the plan (or based upon a rollover contribution from a previously established Roth account under another applicable retirement plan, if earlier).
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Service
The period of time credited to you in your pension plan which is used in determining if you are entitled to a benefit and the amount of your benefit. There are several ways of determining service, depending on the purpose for which it is used.
Stock
Stock is a share of ownership in a company.
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Termination
Your employment ends for a reason other than death, disability or retirement.
Total Return
The dividends and interest received, plus any change in the value of the principal. If your mutual fund share price increased from $23 to $25 and you received a .20 cent/share dividend, your total return was $2.20 - a little over 9%.
Treasury Securities

The IOU's of the government. The federal government borrows money by selling securities. There are three types based on maturity dates.

 

  • T-Bills, 90 days to one year
  • T-Notes, one to ten years
  • T-Bonds, ten to thirty years

 

Treasuries are considered to have no risk of default. But, like all bonds, they are vulnerable to interest rate risk.

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Valuation Date
Any Business Day on which MassMutual determines the amount in the [Guaranteed Interest Account or Fixed Interest Account] and determines the price for each investment option.
Vested Balance
That portion of your account balance that you can take at termination.
Vesting
The right you have to benefits from the plan if you terminate employment prior to retirement and have met appropriate plan requirements. This right is protected by law and is nonforfeitable.
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Years in Retirement

People today have a longer life expectancy than their parents. Based on your current age, check how many more years you might expect to live.                      

Age

# of years expected to live

Total Life Expectancy

35

48.5

83.5 years

40

43.6

83.6 years

45

38.8

83.8 years

50

34.2

84.2 years

65

21

86.0 years

70

17

87.0 years

75

14.1

89.1 years

80

10.2

90.2 years

90

5.5

95.5 years

Source: 2002 Internal Revenue Service Life Expectancy Tables,                  

publication 590                                                 

The IRS life expectancy table is based on unisex actuarial tables and uses median numbers, which means that the average person has a 50% chance of living longer or dying sooner than the IRS number indicates.
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We Can Help

Contact us for personalized assistance.

For immediate assistance, contact our Participant Information Center at 1-800-743-5274

Monday through Friday Between 8 a.m. and 8 p.m. ET.

After entering in your Social Security Number and PIN, press “1” for account information and to speak with a representative.

Retired or Terminated Participants, contact a Retirement Specialist at 1-800-743-5274

Monday through Friday Between 8 a.m. and 6 p.m. ET.

After entering in your Social Security Number and PIN, press “2” to speak with a representative.