Learn terms used for different types of income, investment and retirement


The different types of income and resources that older adults might own are often described using the terms below.


Assets are anything of value, including a person's "real property," or land and buildings, plus their "personal property," such as cash, valuables and investments.


Cash includes paper bills and coins, and investments that can be quickly turned into cash, like savings or money market accounts and U.S. Treasury bonds.


Financial investments are assets that people put money into with the expectation that it will grow into a larger sum.

  • Bonds are like an IOU. The investor loans money to an organization or government for a period of time. The money is paid back with interest when the bond matures.

  • Certificates of deposit (CDs) are low-risk investments set for a certain period of time, often at a fixed interest rate.

  • Mutual funds are investments in which money from many investors is pooled together to buy collections of stocks, bonds or other securities that are managed by an investment company.

  • Stocks are shares of ownership in a public or private company, held by investors called shareholders.

Investment income can be interest payments (for bonds), or dividends (for stocks). Mutual funds pay out both interest from bonds and dividends from stocks.


Retirement plans are savings and investment plans that provide income in retirement.

  • Social Security is a U.S. Retirement program that pays benefits to retirees and spouses of deceased workers, taking into account lifetime earnings and retirement age.

  • Pensions are one type of employer-sponsored retirement plan that pays a guaranteed benefit each month, taking into account the retiree's earnings history and length of employment.

  • 401(k)s and 403(b)s are other employer-sponsored retirement plans into which employees put part of their paycheck each month to draw on in retirement.

  • Individual retirement accounts (IRAs) are retirement savings accounts that anyone under a certain age can open. The most common types are the traditional IRA and Roth IRA.

Older adults might get income in retirement from:

  • Annuities, investments offered by insurance companies that pay out over a certain amount of time

  • Reverse mortgages, a type of home loan in which older homeowners get cash for part of their home equity and repay the loan when the home is sold, the borrower and spouse move out of the home, or the borrower passes away