Personal Finance Glossary M to Q: Plain-English Definitions

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Finance is full of terms that sound simple until you have to use them. This page is a plain-English glossary for Personal Finance, covering entries such as MAGI — Modified Adjusted Gross Income, Marginal Tax Rate, Marriage Bonus / Marriage Penalty, Means Test, Medicaid Look-Back, each with a short definition and a pointer to the part of the volume where it is explained.

Keep it open while you read, or use it to settle an argument about what a term really means. Every entry is written to stand on its own, with no jargon left undefined, and the part number beside it tells you where to read more. Use it as a quick reference whenever a term trips you up.

A sample of the entries (74 terms on the full page)

MAGI — Modified Adjusted Gross Income — AGI with certain items added back; the definition varies by rule (for IRMAA, AGI plus tax-exempt interest). Most phase-outs, credits and premium tiers key off it. (Parts 9.1 and 10.9)

Means Test — The bankruptcy calculation that compares a filer’s average income over the prior six months with the state median and steers higher-income filers toward Chapter 13. (Part 3.8)

Medical Loss Ratio — The share of health-insurance premiums spent on medical care and quality improvement. Under the ACA it must be at least 85% in the large-group market and 80% in the individual and small-group markets, or the insurer rebates the difference. (Part 8.1)

Medicare Part B — Doctors, outpatient care and tests; 2026 standard premium $202.90 a month and deductible $283, then 80% coverage with no annual cap on the 20%; late enrollment adds 10% per full 12-month delay, for life. (Part 10.9)

Medigap Trial Right — A federal right for someone who joined a Medicare Advantage plan when first eligible at 65 to return to Original Medicare within the first 12 months and buy any Medigap policy without health questions. (Part 10.9)

Minimum Payment — The smallest amount owed on a credit card each month — calculated to be barely more than accruing interest. (Part 3.3)

Money Market Mutual Fund — An investment fund holding short-term debt and tracking short-term rates daily; not a deposit and not FDIC-insured, even when bought at a bank. (Parts 2.6 and 2.7)

Multiple Support Agreement — An IRS Form 2120 agreement that lets one of several people who together provide more than half of a relative’s support claim that relative as a dependent. (Part 11.6)

Negative Equity — Owing more on a car loan than the car is worth; rolling it into the next loan raises the payment and keeps the buyer underwater longer. (Part 3.9)

Net Unrealized Appreciation (NUA) — The rise in value of employer stock while it was held in a retirement plan. If the shares are taken out in kind as part of a lump-sum distribution, only the plan’s cost basis is taxed as ordinary income at once, and the NUA is taxed as long-term capital gain when the shares are sold. (Part 6.7)

NSF Fee — Non-Sufficient Funds fee, charged when a bank declines a transaction for lack of funds. (Part 2.4)

Origination Fee — An upfront charge on a loan, often deducted from the proceeds; it is included in the APR. (Part 3.6)

Own-Occupation / Any-Occupation — Two definitions of disability in income-protection policies. Own-occupation pays if you cannot do the main duties of your regular job; any-occupation pays only if you cannot do any job suited to your education, training and experience. (Part 8.4)

Passkey — A phishing-resistant login credential under the FIDO standards, tied to the site it was created for and held on your device, so a look-alike site gets nothing usable. (Part 13.4)

PBGC — Pension Benefit Guaranty Corporation — The federal agency that insures private-sector defined-benefit pensions up to a legal maximum if a plan fails; it does not cover 401(k)s or government plans. (Part 10.4)

Penalty Divisor — The state’s average monthly private-pay nursing-home cost, used to turn a gift made within Medicaid’s 60-month look-back into months of ineligibility: amount given ÷ divisor. (Part 10.10)

Percentage Method (Withholding) — The IRS payroll method that annualizes each paycheck’s taxable wages, subtracts the standard deduction built into the tables, applies the year’s brackets and divides back to one pay period. It is exact only when every check is the same size. (Part 1.6)

PITI — Principal, Interest, Taxes, Insurance — the full monthly housing payment measured against the 28% front-end affordability rule. (Part 5.2)

POLST — Portable medical orders for life-sustaining treatment, signed by a clinician for someone seriously ill or frail and followed by emergency crews; it supplements, and differs from, a living will. (Part 12.2)