Truth 47 Definitions

Sometimes the terms used with IRAs and 401(k)s are confusing. Other times they seem to be written in code. Often, they are—the Internal Revenue Code. Either way, it’s helpful to understand the meaning of the many words and acronyms that you’ll encounter.

12b-1 fee—A continuing fee that many mutual funds charge to the holders of mutual funds to cover advertising and marketing expenses. Some mutual funds proclaim that they are “no load” but still charge 12b-1 fees.

401(k)—A type of employer-sponsored retirement program that takes its name from the authorizing section of the Internal Revenue Code. It is a defined contribution plan.

Actively managed mutual fund—A mutual fund to which you pay a fee for the mutual ...

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