Dave Ramsey Definitions Latest Update 100% Correct

Dave Ramsey Definitions Latest Update 100% Correct SEPP A retirement plan for self-employed people 457 A deferred compensation plan 401(k) Typical retirement plan found in most companies 403(b) Retirement plan found in non-profit groups (schools, hospitals) Educational Savings Account Save for college by first using this type of account UTMA Used after you max out the ESA Rollover Movement of funds from a tax-deferred retirement plan from one qualified plan or custodian to another. Custodian Manager of a child's UTMA account until he or she reaches age 21 Roth IRA A personal savings plan; contributions are not tax-deductible; earnings are tax-free Pension A sum of money paid regularly by a company to someone who has retired or has a disability Baby Step 1 $1000 in an emergency fund (or $500 if you make less than $20,000/year) Baby Step 2 Pay off all debt except the house utilizing the debt snowball Baby Step 3 Three to six months expenses in savings Baby Step 4 Invest 15% of your household income into Roth IRAs and pre-tax retirement plans Baby Step 5 Invest for college funding Baby Step 6 Pay off your home mortgage Baby Step 7 Build wealth and give Debt Snowball Preferred method of debt repayment; includes a list of all debts organized from smallest to largest balance; minimum payments are made to all debts except for the smallest, which is attacked with the largest possible payments ARM Adjustable Rate Mortgage. A home loan in which the interest rate will change periodically (i.e. annually), your payment