Personal Finance Glossary R to S: 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 RAP — Repayment Assistance Plan, Rate Caps (ARM), Rate Lock, Real Return (vs Nominal Return), Rebalancing, 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 (68 terms on the full page)

RAP — Repayment Assistance Plan — The only income-driven plan for borrowers with a federal loan first disbursed on or after July 1, 2026: 1%–10% of total AGI by $10,000 bands, minus $50 a month per dependent, minimum $10 a month; unpaid monthly interest is waived and any balance is forgiven after 360 qualifying payments (30 years). (Part 4.3)

Real Return (vs Nominal Return) — A nominal return is counted in future dollars; the real return removes inflation: real = (1 + nominal) ÷ (1 + inflation) − 1, so 7% nominal with 3% inflation is 1.07 ÷ 1.03 − 1 = 3.88%. (Parts 2.7 and 7.1)

Refundable Credit — A tax credit paid to you even if it exceeds the tax you owe. A nonrefundable credit can reduce tax only to zero; a partly refundable one, like the Child Tax Credit, pays out only a capped portion. (Part 9.4)

Regulation D (Six-Transfer Limit) — The Federal Reserve rule that once limited convenient withdrawals from savings to six a month; the Fed deleted the limit on April 24, 2020, though banks may keep one by contract. (Part 2.1)

Replacement Cost — Insurance settlement that pays to repair or replace damaged property with materials of like kind and quality, with no deduction for depreciation. (Part 8.5)

Retirement Savings Lost and Found — A Department of Labor database, created by SECURE 2.0, for finding private-sector employer and union retirement plans from past jobs. (Part 6.7)

Revocation-on-Divorce Statute — A state law that automatically cancels an ex-spouse’s beneficiary designation at divorce. Where a state has one, it can apply to IRAs and individual policies, but it is preempted for employer plans governed by ERISA. (Part 12.1)

Roth Catch-Up Rule — From 2026, a worker whose prior-year FICA wages from the plan sponsor exceeded $150,000 must make 401(k), 403(b) and governmental 457(b) catch-up contributions as Roth; the IRS’s final regulations apply from 2027, with good-faith compliance before then. (Part 6.2)

Rule of 55 — The exception that removes the 10% additional tax on withdrawals from an employer plan for someone who leaves that employer in or after the calendar year they turn 55 (50 for certain public-safety employees); it does not apply to IRAs. (Part 6.7)

Saver’s Credit — A credit of 50%, 20% or 10% of up to $2,000 of retirement contributions for lower-income savers; 2026 AGI limits $40,250 single, $60,375 head of household, $80,500 joint, with a cliff at each limit. (Parts 9.1 and 9.4)

Self-Employment Tax — The 15.3% combined Social Security/Medicare tax a self-employed person owes on 92.35% of net self-employment profit, with the 12.4% Social Security part applying only up to the $184,500 wage base (2026). (Part 9.3)

SEP-IRA — A Simplified Employee Pension: an employer-only retirement contribution of up to 25% of pay (20% of net profit after half of self-employment tax for a sole proprietor), capped at $72,000 for 2026, which can be opened and funded up to the tax-filing deadline including extensions; employees must get the same percentage. (Part 6.8)

SIM Swap — A fraud in which an attacker moves your phone number to a SIM card they control, intercepting text codes and password resets; FCC rules adopted in 2023 will require carriers to offer free number-lock protection, but compliance has been postponed, so ask your carrier to turn it on. (Part 13.4)

SIPC Protection — Coverage by the Securities Investor Protection Corporation that restores missing cash and securities when a member brokerage fails, up to $500,000 per customer including $250,000 of cash; it does not cover market losses. (Part 7.9)

Solo 401(k) — A one-participant 401(k) for a business owner with no employees other than a spouse; the owner contributes as employee (up to $24,500 for 2026) and as employer (20% of net profit after half of self-employment tax), up to $72,000 in total. (Part 6.8)