Today’s Prep:
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.
Equipping Points:
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?
Today’s Takeaway:
“One of the things we do is help people understand and make it not as convoluted as it appears to be with Social Security.“
-Eric Peterson
Related Resources:
Do You Agree or Disagree with this Retirement Advice?
Subscribe To The Podcast:
Apple Podcasts - Google Podcasts - Spotify - Stitcher - iHeartRadio - TuneIn
Check out some other recent episodes
Financial Truths Hidden in Famous Songs
Money shows up in our favorite songs for a reason. It captures the emotions, tensions, and tradeoffs we all feel when it comes to finances. In this episode, Eric has some fun pulling financial lessons from iconic lyrics and exploring what they reveal about real-life money decisions. You might never hear these songs the same way again.
Are You Falling for Financial “Shiny Objects?”
In a world full of flashy promises and polished marketing, how do you know what actually matters when choosing a financial professional? In this episode, Eric tackles “shiny object syndrome” in retirement planning- the glossy brochures, impressive projections, testimonials, awards, and alphabet soup of credentials that can distract investors from what really counts. Eric breaks down which tools can be helpful, which deserve skepticism, and why trust, process, and real-world experience ultimately outweigh hype.
Mailbag: Do I Really Need An Advisor If I Have Enough Money?
When it comes to retirement, having enough money doesn’t automatically mean having everything figured out. In this episode, Eric tackles real listener questions that reveal where even confident savers can still go wrong. From deciding wheth-er an advisor adds value when money isn’t an issue, to the risks of relying on stock-picking and “passive income” strategies for early retirement, the conversation centers on one core idea: having options isn’t the same as having a strategy.
Retiree’s First Christmas: The First Holiday Season After You Retire
We’ve all seen those Christmas ornaments that say things like “Baby’s First Christmas.” It’s a milestone moment worth commemorating. But what about a retiree’s first Christmas? You may not have a specialty ornament to hang on the tree for this one, but that doesn’t mean it isn’t a milestone.
Does It Even Matter?: What Retirees Should Actually Worry About
We’re bombarded daily with headlines that spark panic, but how much of it really matters for your retirement?
Wizard of Oz Lessons for Retirement Planning
Your retirement journey has more in common with The Wizard of Oz than you might think. In
Money Mistakes You Only Make Once
Eric explores common money mistakes people often make when planning for retirement, and scenarios that could cost you in the long run. The discussion also covers critical considerations around long-term care and how to avoid financial setbacks. Tune in to learn what you can do now to steer clear of these all-too-common errors and set yourself up for a worry-free retirement.
The Friendly Skies of Retirement Planning
What do flight plans and retirement strategies have in common? In today’s episode, Eric draws an analogy between pilot-ing a plane and navigating retirement.
Tough Conversations: Facing Life’s Hardest Financial Moments
It’s time to get comfortable with the uncomfortable.
Financial Lessons from Aesop’s Fables
Think fairy tales are just for kids? Think again. The secrets to lasting wealth may be hiding in stories you heard at bedtime.