Stock Market Glossary letter R
Retirement – Retirement refers to the point in a person’s life at which they stop working and, hopefully, begin to live off of their savings and investments. Retirement should be foremost in the minds of any new investors, no matter how young they may be. This is because the archetypical retirement savings strategy consists of saving small amounts of money over a long period of time. If invested wisely, an individual can succeed in amassing an appreciable “nest egg” to support themselves in their retirement and have something to leave to their descendants if they so desire.
Retirement Plan – A retirement plan is a government-sanctioned method of accumulating funds that will support an individual or couple in their “golden years” following retirement. Popular retirement plans include the 401-K plan and Roth IRAs, with the acronym “IRA” standing for Individual Retirement Account. The best retirement plans defer taxes on the capital gains realized by the plan’s investment(s) until retirement age.
Risk – Risk in financial investing is a crucial part of the process, and it can be divided into opposing components known as Upside and Downside Risk. Various types of investments encompass the taking of various amounts of risk, and any budding investor must carefully weigh the risk involved before making an investment.