Every area of your life has its own language. Oh it may still be in English, or Spanish or even Mandarin Chinese, but the terms, phrases, and meanings change depending on the application. For example, when a carpenter mentions the word “stud” it has a whole different meaning to a horse breeder, a tire changer, someone trying on earrings, or looking for a husband.
Other terms are confusing because they are rarely used in any other arena and a lot of the terms used in retirement plans fit that bill. To make certain you can make the best decision between your plan choices, you need to know what all these various terms mean. Deciding which plan fits you best is a decision that’s best made after you’ve done just a little research, asked a few questions, and educated yourself on retirement plan terminology.
The IRS has firm annual enrollment deadlines and contribution deadlines for each type of retirement plan:
- Enrollment deadlines: Specify the date by which you must set up the retirement plan account
- Contribution deadlines: Specify the date by which you must make contributions into the account
These deadlines vary from plan to plan and are separate from any deadlines that your company might impose.