Page 123 - The Informed Fed--Hearn Wealth Management

promise any specific dollar benefit to a participant at retirement. Benefits
received are based on amounts contributed, investment performance and

vesting. The most common type of defined contribution plan is the
401(k) profit-sharing plan.

Deflation: A period in which the general price level of goods and
services is declining.

Depreciation: Charges made against earnings to write off the cost of a
fixed asset over its estimated useful life. Depreciation does not represent

a cash outlay. It is a bookkeeping entry representing the decline in value
of an asset over time.

Direct Deposit: A means of authorizing payment made by governments
or companies to be deposited dir
mainly for the deposit of salary, pension and interest checks.

Disability insurance: Insurance designed to replace a percentage of

earned income if accident or illness prevents the beneficiary from
pursuing his or her livelihood.

Disposable income: After-tax income available for spending, saving or
investing.

Diversification: Spreading investment risk among a number of different
securities, properties, companies, industries or geographical locations.
Diversification does not assure against market loss.

Dividend Reinvestment plan (DRIP): An investment plan that allows

shareholders to receive stock in lieu of cash dividends.

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