Personal Finance Glossary T to Z: Plain-English Definitions

About this page

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 Target-Date Fund, Tax Drag, Tax-Gain Harvesting, Tax-Loss Harvesting, Tax Torpedo, 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 (40 terms on the full page)

Target-Date Fund — One fund holding a complete stock-and-bond portfolio named for a retirement year, shifting toward bonds along its glide path and rebalancing automatically; check the fee, because the label doesn’t show it. (Part 7.8)

Tax Drag — The yearly reduction in a taxable investment’s growth caused by taxes on its dividends and realized gains. (Part 7.6)

Tax-Gain Harvesting — Realizing long-term gains while taxable income stays inside the 0% capital-gains bracket ($49,450 single for 2026), then rebuying to reset cost basis higher. (Part 9.5)

Tax-Loss Harvesting — Selling investments at a loss to offset gains, then up to $3,000 of ordinary income annually. (Part 9.5)

Tax Torpedo — The jump in marginal tax rate when each extra dollar of other income also makes up to 85 cents of Social Security taxable, so a 12% bracket costs 22.2% on the next dollar. (Part 10.8)

Taxable-Equivalent Yield — The yield a taxable bond must pay to match a tax-exempt municipal bond: muni yield ÷ (1 − marginal tax rate). (Part 7.6)

Taxable Income — AGI minus the standard or itemized deduction (and any Schedule 1-A deductions); the figure the brackets apply to — $51,800 for the running household on salary alone (1.6), and $52,363 on its 2026 return once $563 of savings interest is added. (Part 9.1)

Temporary Hold (FINRA Rule 2165) — A brokerage’s power to pause a suspicious disbursement or securities transaction for a customer aged 65 or older, or an impaired adult, for up to 15 business days, extendable by 10 more and a further 30 if reported to a state agency or court. (Part 13.5)

Term Life Insurance — Life insurance covering a fixed period at a fixed premium, paying only if death occurs within the term. (Part 8.3)

Thin File — A credit report with too few accounts or too little history to produce a reliable score, or any score at all. (Part 3.7)

Tiered Standard Plan — The fixed repayment plan for federal loans made on or after July 1, 2026, with a 10-, 15-, 20- or 25-year term set by balance; it is the default for borrowers who don’t choose RAP, and it earns no PSLF credit. (Parts 4.2 and 4.3)

Time-Barred Debt — A debt whose statute of limitations has expired; a collector may not sue or threaten to sue on it. (Part 3.8)

TIPS — Treasury Inflation-Protected Securities — Marketable Treasury bonds (5, 10 or 30 years) whose principal rises with the CPI; the coupon is paid on the adjusted principal, and at maturity you get the adjusted or original principal, whichever is greater. Their yield is a real yield; the yearly principal increase is taxable “phantom income” unless held in an IRA or 401(k). Exempt from state and local tax. (Part 7.8)

Total Compensation — Salary plus the value of everything an employer pays for outside the paycheck — retirement match, its share of health premiums, group insurance, equity and paid time off. Several parts are untaxed, so a dollar of benefit can be worth more than a dollar of salary. (Part 6.1)

Tradeline — One credit account as it appears on a credit report: lender, date opened, limit or loan amount, balance, status and payment history. (Part 3.2)

Transfer Incident to Divorce — The tax-free division of an IRA under a divorce or separation instrument; the transferred share becomes the recipient’s own IRA, with no QDRO needed. (Part 11.3)

Treasury Bill — A short-term U.S. government security (4 to 52 weeks), not insured but a direct federal obligation; its interest is exempt from state and local income tax. (Part 2.7)

Trump Account — A tax-advantaged account for children under 18 created by OBBBA: contributions from July 4, 2026, up to $5,000 a year, invested in U.S. stock index funds, with a one-time $1,000 federal deposit for eligible children born 2025–2028; withdrawals generally wait until the year the child turns 18, then follow traditional-IRA rules. (Parts 1.7 and 4.6)