Finance Vocab Exploring Jobs & Careers and Beginning Employment

401 (K)

A workplace retirement plan where employees can contribute income and employers may match contributions

Benefits

Any perk offered to an employee in addition to a salary; the most common are health insurance, disability, and life insurance; retirement and paid time off (PTO)

Career

A professional, occupation, trade, or vocation

Compound Growth - A concept in investing that involves earning returns on both the original investment and any previous returns

Dental Insurance

A type of insurance that helps pay for the costs of visits to a dentist and dental-related services

Disability Insurance

A type of insurance that offers protection for lost wages when an insured person gets sick, injured, or cannot work

Gig Economy

A labor market that relies on temporary and part-time positions filled by contractors and freelancers rather than full-time permanent employees

Gig Work

Temporary or freelance work provided by an independent contractor or on-demand basis

Gross Pay

The amount that an employee earns before taxes, benefits, and other payroll deductions are withheld from their wages

Health Insurance

A type of insurance where an insurance company agrees to pay for some or all of your medical expenses in exchange for a monthly premium payment

Intangible Benefits

Benefits that an employer provides that cannot be quantified in monetary terms

Job

A paid position of employment

Life Insurance

A type of insurance that pays out a sum of money either on the death of the insured person or after a period of time

Medicare

Federal health insurance for people age 65 or older and people under 65 with certain disabilities or health conditions

Net Pay

Take-home pay, or the amount an employee earns after all payroll deductions are subtracted from their pay

OASDI

Old Age, Survivors, and Disability Insurance; A payroll tax that goes toward Social Security and Medicare

Paid Time Off (PTO)

A block of time that an employee is paid for when they are not working

Retirement Plan

A retirement account where an employee can make contributions from his or her paycheck; employee-sponsored _ are often offered by an employer as an employee benefit

Social Security

A federal benefit that provides income for American workers

Social Security Number (SSN)

A nine-digit number that can be used for identification

Social Security Tax

A federal tax on wages that provides most of the funding for Social Security

Taxes

A payment or charge collected by the government to cover the costs of government services or activities

Tuition Reimbursement

An employee benefit where the employer covers some or all of the costs of an employee’s education

Vesting

In a retirement plan, this means when one receives ownership or control; when an employee is 100%, they own the account balance and the employer cannot take it back

W-4

A form used so that an employer can withhold the amount of federal income tax from their pay

Withholding Tax

The amount of an employee’s pay automatically withheld by the employer and sent to the government as a payment of income tax