GLOSSARY

Retirement tax terms, in plain English

The words you'll meet around Roth conversions — explained the way they actually matter.

Roth conversion: Moving money out of a pre-tax retirement account and into a Roth, paying tax on it now so that it — and all its future growth — is never taxed again.
RMD (Required Minimum Distribution): The “spigot.” Starting at age 73 (or 75 if you were born in 1960 or later), the IRS forces you to pull money out of your pre-tax accounts each year, whether you need it or not, and taxes it as ordinary income. The required percentage climbs every year you're alive.
The widow's penalty: When one spouse dies, the survivor files as Single, where the tax brackets are roughly half as wide. The same income lands in a higher bracket, for the rest of their life.
The SECURE Act 10-year rule: The law that ended the “stretch IRA.” Your heirs now have just ten years to empty an inherited IRA, stacking that money on top of their own peak-earning income.
Asset location: Putting each kind of investment in the account where it does the least tax damage — for example, keeping interest-paying holdings inside the IRA rather than a taxable account — so your conversions land in a lower bracket.
QCD (Qualified Charitable Distribution): Giving directly from your IRA to a charity, tax-free, in a way that also counts toward your required withdrawal.
Enrolled Agent: A tax professional licensed by the IRS itself and authorized to give tax advice and represent taxpayers before the IRS.

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