Pension
An income received upon retirement. There are two basic types’ pensions: a defined-benefit plan and a defined-contribution plan.
A defined-benefit is usually paid for by an employer. Upon retirement, the retired individual receives a fixed monthly check based on age, salary and length of service.
A defined-contribution plan puts the responsibility on individual to contribute a percentage of his or her current income to the plan, whereupon the employer pays part or all of his or her contribution upon retirement.
Portfolio
A collection of securities and investments held by an investor. Portfolios usually consist of a variety of securities in order to minimize investment risk.
Power of Attorney
A written document that authorizes an individual to perform certain acts on behalf of the person signing the document. It must be witnessed by a public officer, and can grant full or partial power of attorney. This becomes void upon the death of the person signing the document.
Premium
Usually refers to an extra payment that is used as an incentive.
Prepayment
An early payment of mortgage loans by homeowners. For investors in mortgage-backed bonds, prepayments pose a serious threat. For the homeowner, however, prepayment provides an opportunity to save on mortgage loans.
Probate
The procedure required in each state to validate a will.
Prosperity
A successful, flourishing or thriving condition especially in financial respects; good fortune.