Redemption Fee
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A type of fee that some funds charge their shareholders when they sell or redeem shares. Unlike a deferred sales load, a redemption fee is paid to the fund (not to a broker) and is typically used to defray fund costs associated with a shareholder's redemption.
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Source:
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United States Securities and Exchange Commission
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Registered Investment Advisor (RIA)
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Investment advisor registered with the SEC. No certification is required.
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Source:
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403bCompare.com
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Registered Representative
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An individual who is licensed to sell securities and has the legal power of an agent, having passed the Series 7 and Series 63 examinations. Usually works for a brokerage licensed by the SEC, NYSE, and NASD. Also called account executive.
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Source:
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403bCompare.com
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Return of Principals Guarantee (Principal Protected Funds, Principal Protection, Capital Preservation, or Guaranteed Funds)
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There are several common characteristics shared by these investments: 1. Guarantee principal. Most principal-protected funds guarantee your initial investment minus any front-end sales charge even if the stock markets fall. In many cases, the guarantee is backed by an insurance policy. 2. Lock-up period. If you sell any shares in the fund prior to the end of the "guarantee period" - a period of anywhere from 5 to 10 years - you lose the guarantee on those shares and could lose money if the share price has fallen since your initial investment. 3. Hold a mixture of bonds and stocks. Most principal-protected funds invest a portion of the fund in zero-coupon bonds and other debt securities, and a portion in stocks and other equity investments during the guarantee period. To ensure the fund can support the guarantee, many of these funds may be almost entirely invested in zero-coupon bonds or other debt securities when interest rates are low and equity markets are volatile. Because this allocation provides less exposure to the markets, it may eliminate or greatly reduce any potential gains the fund can achieve from subsequent gains in the stock market. It also may increase the risk to the fund of rising interest rates, which generally cause bond prices to fall. 4. Higher fees. Many principal-protected funds carry an expense ratio (the total annual fees deducted from your holdings) that typically is higher than that of non-protected funds. Fees range from 1.5% to nearly 2%, of which .33% to .75% typically pays for the principal guarantee. In addition, many funds also impose sales charges, plus redemption/penalty fees for early withdrawals that may be significant.
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Source:
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National Association of Securities Dealers, Inc.
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Rider
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A provision added to a policy that provides additional benefits, usually accompanied by a corresponding premium increase or change.
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Source:
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California Department of Insurance
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Rollover
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A rollover occurs when you withdraw cash or other assets from one qualified employer retirement plan and contribute all or part of it within 60 days to another qualified retirement plan or traditional IRA.
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Source:
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Internal Revenue Service Tax Topic 413
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Roth 403(b)
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Prior to January 2006, participants in a 403(b) plan could only make traditional elective contributions with pretax dollars - not subject to income taxes when made. Taxes on the accumulation are deferred until money is withdrawn from the account, at which time the withdrawn amount is subject to income taxes. Now participants may also make a "Roth" elective contribution, which is made after income taxes are withheld. The interest and earnings withdrawn from a Roth Account are tax-free if the distribution is considered "qualified."
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Source:
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403bCompare.com
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