Glossary I – M


Identity Theft
The process of stealing personal or financial information of an individual in order to assume that individuals identity.

Immediate Annuity
An annuity purchased with a single payment. Annuity Payments start right away and are based on a specific period payout or a lifetime payout.

A calculation that uses a selection of stocks or bonds to gauge a certain market. The Dow Jones Industrial Average, for example, is an index of 30 large industrial companies on the New York Stock Exchange.

Individual Retirement Account (IRA)
Contributions to a traditional IRA are deductible from earned income in the calculation of federal and state income taxes if the taxpayer meets certain requirements. The earnings accumulate tax deferred until withdrawn, and then they are taxed as ordinary income. Individuals not eligible to make IRA deductible contributions may make nondeductible contributions, the earnings on which would be tax deferred.


An increase in the price of products and services over time. The government’s main measure of inflation is the Consumer Price Index.

The condition of an estate left by a decedent without a valid will. State law then determines who inherits the property or serves as guardian for any minor children.

Investment Category
A broad class of assets with similar characteristics. The five investment categories include cash equivalents, fixed principal, equity, debt, and tangibles.

Irrevocable Trust
A trust that may not be modified or terminated by the trustor after its creation.

Joint and Survivor Annuity
Most pension plans must offer this form of pension plan payout that pays over the life of the retiree and his or her spouse after the retiree dies. The retiree and his or her spouse must specifically choose not to accept this payment form.

Joint Tenancy
Co-ownership of property by two or more people in which the survivor(s) automatically assumes ownership of a decedent’s interest.

Jointly Held Property
Property owned by two or more persons under joint tenancy, tenancy in common, or, in some states, community property.

Keogh Plan
This retirement plan, named for Eugene Keogh, is designed for self-employed individuals. Up to $44,000 of self-employed income may be deducted from compensation and set aside into the plan.

Large Cap Company
Market capitalization of large companies, usually between $10 billion and $200 billion.

Any claim against the assets of a person or corporation: accounts payable, wages, and salaries payable, dividends declared payable, accrued taxes payable, and fixed or long-term obligations such as mortgages, debentures, and bank loans.

The ease with which an asset or security can be converted into cash without loss of principal.

Living Trust
A trust created by a person during his or her lifetime.

Living Will

A medical document stating how an individual desires medical care in the event of being incapacitated or incapable of communicating their wishes.

Long Term Care Insurance (LTC Insurance)
Insurance that provides coverage for the high costs of nursing home care or in home care.

Lump Sum Distribution
The disbursement of the entire value of a profit-sharing plan, pension plan, annuity, or similar account to the account owner or beneficiary. Lump-sum distributions may be rolled over into another tax-deferred account.

Marginal Tax Bracket
The range of taxable income that is taxable at a certain rate. Currently, there are six marginal tax brackets: 10 percent, 15 percent, 25 percent, 28 percent, 33 percent, and 35 percent.

Market Capitalization
Value of a corporation based on current value of the companies common stock. Calculated by multiplying the number of outstanding shares by the current market price per share.

Marital Deduction
A provision of the tax codes that allows all assets of a deceased spouse to pass to the surviving spouse free of estate taxes. This provision is also referred to as the unlimited marital deduction.

Medicaid / Medi-Cal
Provides increased assistance to those with a financial need and unable to pay for their medical needs. Medicaid is a federal and state administered program. Medicaid pays for hospital care, outpatient care, certain nursing facilities, doctors, laboratory, x-ray services, prescriptions, Long-Term Care, and some home health care after current assets are exhausted.

Medical Power Of Attorney
Also known as durable medical power of attorney, is a legal mechanism that allows a designated person to make medical decisions for an individual should that individual be unable to make decisions due to incapacitation.

Is a federal administered program developed by Congress in 1965 as an amendment to the Social Security Program. It is not designed for a specific class of society, but
primarily for our citizens age 65 and older. Others of any age who received Social Security disability benefits for at least two years are eligible. Medicare is a federal
health insurance program. There are two traditional parts to the program: Part A – Hospital Insurance and Part B – Medical Insurance. For more information go to

Mid Cap Company
Market capitalization of mid-sized companies, usually between $2 billion and $10 billion. Short for “middle cap“.

Money Market Account
A savings account that pays competitive interest rates with the benefit of liquidity.