This First Premier Bank glossary defines the terms a financial advisor uses with service members and veterans who have a military pension, the Thrift Savings Plan and a second career after service. Each entry is short, and most end with a small example in round numbers.
Skim it before a first meeting or keep it open while you read your benefits letter. Figures that change by year are stated for tax year 2026; for anything else, check the current limit.
A
- Annual gift tax exclusion
- The amount you can give each person in a year without filing a gift tax return. For 2026 it is $19,000 per recipient. A married couple giving to one adult child could pass $38,000 between them.
- Asset allocation
- The split of your investments among stocks, bonds and cash. It drives most of how bumpy the ride feels. A veteran who needs pension-plus-savings income in 5 years may hold more bonds than one who won't touch the money for 20.
B
- Beneficiary designation
- The form on file with an account or policy naming who receives it when you die. It overrides your will. Many people forget to update TSP and IRA forms after a marriage, divorce or new child.
C
- Cost basis
- What you paid for an investment, used to work out the taxable gain when you sell. If you bought shares for $20,000 and sell at $26,000, the gain is $6,000. Ask the old custodian for basis records in writing.
- Cost-of-living adjustment (COLA)
- An annual increase to a benefit so it keeps pace with prices. Social Security's COLA for 2026 benefits is 2.8%. On a $3,000 monthly benefit, that is about $84 more each month.
D
- Deferred compensation
- Pay earned now but received later, often after you leave an employer. Second-career executives meet it in nonqualified plans. Unlike a TSP balance, it can depend on the company's finances, so ask what happens if the employer fails.
E
- Expense ratio
- The yearly cost of owning a fund, shown as a percentage of what you hold. A 0.45% difference on $600K costs $2,700 a year. Compare it before you move money out of low-cost TSP funds.
F
- Fiduciary
- A person legally required to put a client's interests first when giving certain advice. The word describes a legal standard, not a title anyone can claim. Ask any advisor in writing whether they act as one and for which services.
- Full retirement age
- The age when you get 100% of your Social Security benefit. It is 67 for anyone born in 1960 or later. Claiming earlier shrinks the check for life, so it is worth running the numbers first.
H
- Health savings account (HSA)
- A tax-advantaged account for medical costs, available with a qualifying high-deductible health plan. For 2026 the limit is $4,400 self-only or $8,750 family, plus $1,000 at 55 and older. Your second employer may offer one.
- High-3 average
- The average of your 3 highest-paid years of basic pay, used to figure a military pension under the legacy retirement system. At a $90K average and a 50% multiplier, the pension is $45K a year. Check your own multiplier.
I
- Income draws
- Money you take from savings and investments to live on after paychecks stop. A pension covers part; the rest comes from accounts. Which account you pull from first changes the tax cost every year.
- Investable assets
- Money you can put to work: TSP, IRAs, brokerage accounts and cash. A home or the value of a pension usually doesn't count. First Premier Bank's client minimum is $500K in investable assets.
- IRMAA
- The income-related monthly adjustment amount, an extra charge added to Medicare Part B and D premiums for higher earners. It uses your income from 2 years earlier. A big Roth conversion at 63 can raise premiums at 65.
M
- Marginal tax bracket
- The rate applied to your last dollar of taxable income. The top federal rate is 37%, above $640,600 single or $768,700 married filing jointly in 2026. Knowing yours shows what an extra $10K of income would cost.
- Medicare Part B
- The part of Medicare covering doctor visits and outpatient care. The 2026 standard premium is $202.90 a month with a $283 annual deductible. Higher incomes pay more through IRMAA; TRICARE for Life coordinates with it.
- Military retirement planning
- Building a spending and tax roadmap around a military pension, TSP, VA benefits and a second paycheck. First Premier Bank starts with due dates, such as survivor election and rollover timing, then makes each decision with the numbers in front of you.
- Modified adjusted gross income (MAGI)
- Adjusted gross income with certain deductions added back. It sets Roth IRA eligibility and IRMAA tiers. Single filers start losing Roth contribution room at $153,000 in 2026, so a pension plus a second salary matters.
R
- Rebalancing
- Selling some of what has grown and buying what has lagged to return a portfolio to its target mix. In a taxable account the sale can trigger tax. Inside the TSP or an IRA it usually doesn't.
- Required minimum distribution (RMD)
- The yearly amount you must take from pre-tax retirement accounts once you reach a set age: 73, or 75 if born in 1960 or later. Missing one brings a penalty, so watch for the RMD notice from your custodian.
- Roth conversion
- Moving money from a pre-tax account to a Roth IRA and paying income tax on it now. Converting $30K at a 22% rate costs $6,600 in tax today. Later growth and qualified income draws are tax-free.
- Roth IRA
- An individual retirement account funded with after-tax dollars, with qualified income draws tax-free. The 2026 combined IRA limit is $7,500, or $8,600 at 50 and older. Income phase-outs apply: $153,000-$168,000 single.
- Roth TSP
- The after-tax side of the Thrift Savings Plan. You pay tax on contributions now; qualified income draws later are tax-free. The 2026 employee limit is $24,500 across traditional and Roth, a good fit in low-tax years.
S
- Sequence-of-returns risk
- The danger that poor market years land right when you start taking income draws. Selling in a drop locks in losses. Keeping 2 years of spending in cash lets you avoid selling then. Every investment can lose money.
- Social Security earnings test
- A rule that temporarily withholds benefits if you claim before full retirement age and keep working. In 2026 the limit is $24,480 a year, or $65,160 in the year you reach full retirement age. Withheld amounts are credited back later.
- Standard deduction
- A flat amount subtracted from income before tax, instead of itemizing. For 2026 it is $16,100 single, $32,200 married filing jointly and $24,150 head of household. Pension income is taxed only above it.
- Survivor Benefit Plan (SBP)
- A military program paying a monthly annuity to a surviving spouse or other eligible beneficiary after a retiree dies. Premiums come out of the pension. It is typically 55% of the covered amount; check your election paperwork.
- Survivor Benefit Plan analysis
- A side-by-side look at paying SBP premiums versus covering the spouse with life insurance or savings. First Premier Bank prices both with your actual pension figures, because an election often can't be reversed easily.
T
- Tax planning for veterans
- Mapping the taxes on a pension, VA benefits, TSP income draws and second-career pay before the year ends. At First Premier Bank, the tax cost of each move is estimated first. VA disability pay is generally not taxable.
- Thrift Savings Plan (TSP)
- The federal government's retirement savings plan for service members and federal employees, with traditional and Roth options. The 2026 deferral limit is $24,500. Once you separate, the balance can stay put or move.
- Traditional IRA
- An individual retirement account where contributions may be deductible and income draws are taxed as ordinary income. RMDs apply. It's the usual landing place for a rollover from a TSP or an old 401(k).
- TSP to IRA rollover
- Moving a TSP balance into an IRA, ideally by direct transfer so no tax is withheld. First Premier Bank compares the TSP's low costs with IRA investment choices before moving anything. The tradeoff: you may give up some TSP features.
V
- VA disability compensation
- A monthly, tax-free benefit paid for service-connected conditions. It is separate from military retired pay, though some retirees can receive both. It can offset income needs, but rules like concurrent receipt vary, so check your VA award letter.