Twenty-five plain-language definitions for financial, benefits, legal, retirement, and decision terms that often appear during a major transition.
Use these definitions as a starting point. They are general educational summaries, not legal, tax, benefits, investment, or financial advice. Follow the source link and confirm the current rule for your plan, state, agency, and facts.
A federal continuation-coverage law that can let qualified people temporarily keep employer group health coverage after certain events. The person may have to pay the full plan cost plus up to 2%, and eligibility, notices, and duration depend on the event and plan.
Social Security Disability Insurance provides monthly payments to eligible people whose disability stops or limits work and who have enough work history. Benefit amounts depend on the person's earnings record.
The federal or state marketplace where individuals and families can shop for health coverage. Losing qualifying job-based coverage can create a Special Enrollment Period; dates, financial assistance, and eligibility depend on current rules and household facts.
A review of certain asset transfers when a person applies for Medicaid long-term services and supports. Transfers for less than fair market value during the applicable five-year period can affect coverage, subject to exceptions and state administration.
Source: Medicaid eligibility policy.
The Family and Medical Leave Act, which gives eligible employees of covered employers unpaid, job-protected leave for specified family and medical reasons. Many qualifying reasons allow up to 12 workweeks in a defined 12-month period; coverage and employee eligibility tests apply.
A tax-advantaged account for an eligible person whose disability began before age 46 under the rules effective in 2026. Qualified disability expenses and interactions with benefit programs follow federal and state rules; current contribution and SSI treatment should be verified.
Source: ABLE National Resource Center history and 2026 changes.
A domestic relations order that assigns or recognizes an alternate payee's right to some or all benefits under an employer retirement plan and meets federal qualification requirements. A plan administrator determines whether the order qualifies.
A bankruptcy calculation used mainly to determine whether a consumer's Chapter 7 filing is presumed abusive. It uses statutory income and expense rules; passing or failing is not the only eligibility issue.
Source: U.S. Courts Chapter 7 basics.
A federal bankruptcy process generally involving liquidation of nonexempt assets and possible discharge of qualifying debts. Eligibility, exemptions, and whether a debt can be discharged depend on federal and state law and the case facts.
Source: U.S. Courts Chapter 7 basics.
A federal bankruptcy process for individuals with regular income who propose a court-supervised plan to repay some or all debts over time, usually three to five years. Completion and discharge depend on the confirmed plan and legal requirements.
Source: U.S. Courts Chapter 13 basics.
A state-law approach used by many jurisdictions to divide marital property according to fairness factors rather than a required equal split. What counts as marital property and which factors apply depend on the jurisdiction.
Source: Cornell Legal Information Institute; verify controlling state law.
A state-law system that generally treats certain property or income acquired during marriage as jointly owned. Definitions, exceptions, tax treatment, and division rules vary by jurisdiction; it does not make every asset an automatic 50/50 division.
Source: IRS Publication 555; verify controlling state law.
Payments from one spouse or former spouse to another under a court order or qualifying agreement, also called spousal support or maintenance. Eligibility, amount, duration, modification, and tax treatment depend on the governing law and the instrument's facts and date.
Source: IRS Publication 504; verify controlling state law.
Private mortgage insurance that generally protects a mortgage lender, not the borrower, when required on certain conventional loans. For many covered mortgages, a borrower may request cancellation at 80% of original value if conditions are met, and automatic termination generally occurs when the scheduled balance reaches 78% and payments are current.
Debt-to-income ratio: total monthly debt payments divided by gross monthly income. Lenders use it as one measure of repayment capacity, but acceptable limits vary by lender and loan product.
A cash reserve set aside for unplanned expenses or loss of income. The appropriate target depends on the household's circumstances; there is no single amount that fits everyone.
Source: Consumer Financial Protection Bureau emergency-fund guide.
A numeric comparison of price levels across places, but there is no single universal index. The Bureau of Economic Analysis regional price parities compare state and metro price levels with the national level for a given year; methodology and reference period matter.
Source: U.S. Bureau of Economic Analysis regional price parities.
A retirement-spending rule of thumb that starts withdrawals near 4% of the initial portfolio in year one and adjusts the dollar amount for inflation afterward. It came from historical simulations with particular portfolio and time-horizon assumptions, so it is not a guarantee or a personalized safe rate.
Original source: William P. Bengen, Journal of Financial Planning (1994).
Department of Veterans Affairs education-benefit programs for eligible service members, veterans, and in some cases family members. Covered tuition, housing, books, training, and transfer rules depend on the specific program and eligibility level.
A home loan made by a private lender and backed in part by the Department of Veterans Affairs for eligible borrowers. VA rules can allow no down payment and no monthly mortgage insurance, while lender standards, closing costs, and possible funding fees still apply.
The Thrift Savings Plan, a defined-contribution retirement savings and investment plan for federal employees and members of the uniformed services. It offers traditional and Roth contribution treatment; eligibility, matching, limits, and withdrawal rules follow federal plan rules.
Source: Thrift Savings Plan overview.
A tax-advantaged qualified tuition program sponsored by a state or eligible educational institution. Federal tax-free distributions require qualified expenses; state benefits, eligible uses, contribution treatment, and plan limits can vary.
A pattern in prospect theory in which losses can carry more subjective weight than equivalent gains. It is a population-level decision concept, not proof that a particular person is biased or that one option is correct.
Research source: Kahneman and Tversky, “Prospect Theory” (1979).
A tendency for an existing or default option to receive extra preference simply because it is the current state. Real costs, uncertainty, and informed preferences can also justify staying put, so the label alone does not determine the better choice.
Research source: Samuelson and Zeckhauser, “Status Quo Bias in Decision Making” (1988).
A tendency to give disproportionate weight to immediate costs or rewards relative to later consequences. It can contribute to time-inconsistent choices, but it does not explain every decision to prioritize the present.
Research source: Laibson, “Golden Eggs and Hyperbolic Discounting” (1997).
Use the linked source, write down the rule that applies to your facts, and verify it with the appropriate agency, plan administrator, lender, court, or qualified professional.
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