[FN-01] Glossary

The terms this wiki assumes you know — and the four or five that mean different things in different places, which is where the money is lost.

Pillar: Foundations · Last verified: August 2026 · Refresh cadence: Evergreen — definitions are structural; the figures they reference live in FN-02 Type: Reference Convention: Definitions here are deliberately short. Each term names the article that owns it; that page carries the mechanics, the arithmetic, and the caveats.

Verification legend: ✅ = confirmed against primary/authoritative source · ◻️ = high confidence, confirm against the primary source before acting on it

Not advice. A glossary is a map, not a rule. Several terms below are defined differently by different statutes — §1 exists because that ambiguity is the single most expensive thing in this vocabulary. Where a definition decides a real dollar amount, follow the link and read the page that owns it.

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1. MAGI is not one number

This is the most important entry in the glossary. “Modified adjusted gross income” is not a defined term in the tax code — it is a family of terms, each modifying AGI differently, and the differences decide subsidies, premiums, and eligibility.

Which MAGI	Computed as	Owned by
ACA premium tax credit	AGI + tax-exempt interest + non-taxable Social Security + excluded foreign earned income ✅	HC-01
IRMAA (Medicare surcharge)	AGI + tax-exempt interest ✅ — and nothing else	HC-06
Roth IRA contribution eligibility	AGI with its own add-backs, and conversion income excluded ◻️	ER-02
Traditional IRA deduction	Another variant again ◻️	—

Three consequences worth carrying around.

The same household has two different MAGIs in the same year. A retiree at 63 on marketplace coverage is managing ACA MAGI; two years later the same income drives IRMAA under a different formula. SS-05 is the page about living in both at once.

Untaxed Social Security counts for ACA and not for IRMAA. For a household with large benefits and a marketplace plan, that gap is the difference between qualifying and not (SS-03).

Tax-exempt municipal interest counts for both. Muni bonds reduce taxable income and do nothing at all for either threshold ✅.

2. Income and tax measures

Term	What it is	Owned by
AGI	Adjusted gross income — the subtotal every MAGI modifies	—
Taxable income	AGI minus deductions; what the brackets actually apply to	TX-06
Provisional income	The special measure deciding how much Social Security is taxed — AGI + tax-exempt interest + half of benefits ✅	SS-03
Tax torpedo	The band where each extra dollar drags benefits into taxation, so the effective rate exceeds the statutory one	SS-03
NIIT	3.8% net investment income tax above a non-indexed MAGI threshold ✅	FN-02
Basis	What you paid; the part of a withdrawal or sale that is not income	ER-05, TX-01
Step-up in basis	Basis resets to date-of-death value, erasing the unrealised gain ✅	EP-05, ST-01
Specific ID / FIFO	Which share lots a sale draws from — the default is the worst one	TX-01, ER-05
0% LTCG bracket	The band where long-term gains are federally untaxed; stacks on deductions	TX-01
Bunching	Compressing deductible gifts into one year to clear the standard deduction	TX-06
QCD	Qualified charitable distribution — IRA to charity, excluded from AGI rather than deducted ✅	TX-04

3. ACA and health coverage

Term	What it is	Owned by
FPL	Federal poverty level — the yardstick for subsidy eligibility, by household size	FN-02
PTC / APTC	Premium tax credit; Advance if paid to the insurer monthly	HC-01
SLCSP	Second-lowest-cost Silver plan — the benchmark your credit is computed from, not necessarily the plan you buy ✅	HC-01
AV	Actuarial value — the share of costs a plan pays on average; sets the metal tier	HC-01
CSR	Cost-sharing reduction — Silver-only subsidy that raises AV at lower incomes ✅	HC-01
The cliff	400% FPL, where the credit ends abruptly rather than tapering ✅	HC-01
The floor / coverage gap	138% FPL in expansion states, 100% in non-expansion — below which subsidies stop ✅	HC-03
BHP	Basic Health Program — a 200% FPL floor in four jurisdictions ✅	HC-03
MEC	Minimum essential coverage. Healthshares and short-term plans are not ✅	HC-05
STLDI	Short-term, limited-duration insurance — medically underwritten, duration-capped	HC-05
HCSM	Health care sharing ministry — not insurance, no risk transfer, no regulator ✅	HC-05
DPC	Direct primary care — a membership, not coverage; HSA-compatible from 2026 ✅	HC-05
SEP	Special enrolment period — the window a qualifying event opens	HC-01, SS-05

4. Medicare

Term	What it is	Owned by
Parts A / B / C / D	Hospital / medical / Advantage / drugs	HC-02
Medigap	Supplemental policy covering Original Medicare’s cost-sharing	HC-02
Medigap open enrolment	Six months from Part B, once, with guaranteed issue ✅	SS-05, HC-02
IRMAA	Income-related surcharge on Parts B and D, on a two-year lookback ✅	HC-06
SSA-44	The form appealing IRMAA after a life-changing event	HC-06
IEP	Initial enrolment period — seven months around 65 ✅	SS-05
Creditable coverage	Drug coverage good enough to avoid the Part D penalty	SS-05, HC-02

5. Social Security

Term	What it is	Owned by
PIA	Primary insurance amount — your benefit at FRA, and the base every other benefit is computed from	SS-04
AIME	Average indexed monthly earnings — highest 35 years over 420 months ✅	SS-04
Bend points	The 90% / 32% / 15% breakpoints making the formula progressive	SS-04, FN-02
FRA	Full retirement age — 67 for this audience	SS-01
DRC	Delayed retirement credits — 8%/year past FRA. They attach to survivor benefits and never to spousal ✅	SS-02
Earnings test	Withholding while working before FRA — a deferral, restored at FRA ✅	SS-04
Grace year	The first year, when the test may be applied monthly ✅	SS-04
RIB-LIM	The widow(er)’s limit: survivor floor of 82.5% of the deceased’s PIA when they claimed early ✅	SS-02
Deemed filing	Filing for one benefit files for both; ended restricted applications for anyone born on/after 2 Jan 1954 ✅	SS-02
GPO / WEP	Offsets for non-covered pensions — both repealed January 2025 ✅	SS-02, FN-03
COLA	Annual cost-of-living adjustment	FN-02

6. Retirement accounts and access

Term	What it is	Owned by
RMD	Required minimum distribution — begins at 73 or 75 by birth year ✅	TX-04
RBD	Required beginning date — 1 April after the first RMD year, and usually a trap	TX-04
10-year rule	Most non-spouse heirs must empty an inherited IRA in ten years ✅	TX-04
SEPP / 72(t)	Substantially equal periodic payments — penalty-free early access, on a locked schedule	ER-03
Rule of 55	Penalty-free access to that employer’s plan after separating at 55+ ✅	ER-04
Conversion ladder	Rolling traditional to Roth annually, each rung seasoning five years	ER-02
The two five-year clocks	One for earnings, one per conversion — routinely confused ✅	ER-05, ER-02
Contribution basis	Roth contributions, withdrawable any time, tax- and penalty-free ✅	ER-05
NUA	Net unrealised appreciation — employer stock at capital-gains rates	TR-05
HSA / HDHP	The triple-advantaged account and the plan required to fund it	HC-04
The shoebox	Unreimbursed receipts held for a later tax-free HSA withdrawal — no deadline ✅	HC-04

7. Withdrawal strategy

Term	What it is	Owned by
SWR	Safe withdrawal rate — credible published rates span 2.31% to 5.50% ✅	ER-01
SAFEMAX	Bengen’s term for the worst historical case that still survived	ER-01
SORR	Sequence-of-returns risk — volatility times withdrawals; absent without cash flows ✅	ER-06
Bond tent	Temporarily conservative allocation across the fragile window	ER-06
Guardrails	Rules cutting or raising spending when the withdrawal rate strays from plan	TX-07
Dynamic spending	Recomputing from the current balance within a capped band	TX-07
Coast FIRE	Enough invested to reach the number with no further contributions	ER-07
Barista FIRE	Part-time income covering part of spending — a withdrawal, so SORR applies	ER-07
Withdrawal sequencing	Which account funds spending, which is not the same as how much	TX-03

8. State, estate, and residence

Term	What it is	Owned by
Domicile	Your true permanent home — the thing a residency audit contests	ST-03
Statutory residence	A day-count test that can make you resident somewhere you are not domiciled	ST-03
4 U.S.C. §114	The federal shield barring a former state from taxing your retirement income ✅	ST-03
Community property	Nine states where both halves step up at the first death ✅	ST-04, ST-01
Portability	Carrying a deceased spouse’s federal exemption forward — generally unavailable at state level ◻️	EP-05
Credit shelter / bypass trust	The structure preserving the first spouse’s exemption where portability does not exist	EP-05
Estate vs inheritance tax	Paid by the estate, versus paid by the heir according to relationship ✅	EP-05
Expansion / non-expansion	Whether a state took the ACA Medicaid expansion — sets your income floor ✅	HC-03, ST-04

9. Terms this wiki deliberately avoids

Naming these is part of the glossary’s job, because their absence is a choice rather than an oversight.

• “Retirement-friendly state.” A ranking of one variable presented as a total. ST-02 replaces it with a five-line cost sheet.
• “The 4% rule,” used as a fact. It is a US-only, 30-year, worst-historical-case finding (ER-01 §2).
• “Safe,” unqualified. Every rate on this wiki carries a sample, a horizon, and a failure bar, or it is not stated.
• “Guaranteed,” of anything Congress can change. Benefits here are scheduled (SS-01 §7, FN-03).
• “Tax-free,” where “excluded from AGI” is meant. The difference is the whole value of a QCD (TX-04) and the whole point of §1.

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Terms are added here as articles introduce them. If you meet a term in this wiki that is not defined on the page that uses it and not listed here, that is a defect in one of the two — please fix it in the same commit as whatever you were doing.