While financial planning has a lot of numbers involved, here are a few letters and abbreviations you should know, too. Eric explains several common financial abbreviations.

You know your ABCs but do you know what these four sets of letters mean? On today’s podcast, we talk about financial abbreviations that often get thrown around. We discuss what they mean and how it relates to your financial plan.

ETF stands for exchange traded fund. (Don’t confuse this with an EFT, which is your electronic funds transfer that happens when your paycheck comes into your account.) An ETF is a newer investment that has the diversification of a mutual fund and trades like a stock. These help asset managers build portfolios with diversification.

An RMD is something we talk about on the podcast a lot and if you’re retired, maybe you already know what it means. RMD is a required minimum distribution. The IRS requires you to withdraw from your qualified plans once you reach the age of 72 or face a penalty. Are you approaching RMDs?

Sometimes advisors will have a designation after their name. What does it mean if their title carries RIA? This is a registered investment advisor. It can get confusing, but what you want to make sure you look for an RIA that follows the fiduciary way of planning.

Do you know your FRA? This is your full retirement age. You can take Social Security as early as 62 to begin taking retirement and 70 is the latest time to delay it to for benefits. Depending on when you were born, the age you hit your FRA differs. Do you know the best time to take Social Security? Working with an advisor may help you figure out when the ideal time to withdraw Social Security in relation to the rest of your financial plan.

Listen to the entire episode or use on the timestamps below to skip ahead to a particular abbreviation.

1:05 – What is an ETF?

2:36 – Do you know what an RMD is?

4:22 – What about an RIA?

6:05 – What is an FRA?