Retirement Plan Benefits Terms

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This article covers common terms applied to the benefits of retirement plans.

Study these common retirement benefit terms to get a head start on your retirement learning.

Benefit. A payment or coverage that one receives upon reaching a certain age or fulfilling some requirement.
Distribution. A payment of money from a fund given to its beneficiary.
Distribution option. A choice of how one may receive distributions. Options may include a lump sum or schedule of payments based on prevailing rates and life expectancy.
Distribution requirement. A rule that regulates how one may receive distributions. For example, traditional IRAs require that distributions be started by age 73.
Premature distribution. A withdrawal of funds from a plan before one’s eligibility age or date.
Withdrawal plan. A plan in which an investor receives regular payments from the plan. The plan liquidates assets to pay the required amount. Interest, dividends, and capital gains dividends may still be reinvested into the plan.