This glossary from Edgepoint Wealth Management defines the wealth management terms that service members and veterans meet when a military pension, the Thrift Savings Plan and a second-career paycheck land in the same financial picture. Each entry is two or three sentences, short enough to quote.
Dollar limits and ages come from tax year 2026. Where a rule has no figure on this page, check the current limit with the IRS or the plan itself. The definitions are general education, not advice for your situation.
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, so a married couple can give one child $38,000 together.
- Asset allocation
- The split of a portfolio among stocks, bonds and cash. It drives most of the ups and downs you feel. A TSP balance held entirely in one fund has a very different allocation than one spread across several.
B
- Beneficiary designation
- The form that names who receives an account when you die. It overrides your will. Veterans often forget to update TSP and IRA forms after a marriage, divorce or new child.
- Bond fund
- A fund that holds many bonds and pays interest. Its price falls when interest rates rise. Bond funds are often the steady part of an income draw strategy, but they can still lose value.
C
- Catch-up contribution
- Extra money allowed into a retirement account once you reach age 50. In 2026 the TSP, 401(k) and 403(b) catch-up is $8,000, or $11,250 at ages 60 to 63, and the IRA catch-up is $1,100.
- Combat-zone tax exclusion (CZTE)
- A rule that exempts military pay earned in a combat zone from federal income tax. Contributions made from that pay can go into the TSP tax-free, so those dollars may later come out without tax, which matters when you plan income draws.
- Concurrent retirement and disability pay (CRDP)
- A program that lets some retirees receive both military retired pay and VA disability compensation without a dollar-for-dollar offset. Eligibility depends on your years of service and disability rating, so confirm yours before building an income estimate.
- Cost-of-living adjustment (COLA)
- A yearly increase to a benefit to keep up with inflation. Social Security's COLA for 2026 is 2.8 percent. Military retired pay also receives annual adjustments, so both streams rise, though rarely by the same amount.
D
- Deferred compensation
- Pay you earn now but receive later, usually after leaving an employer. A second-career executive may have it. It is generally an unsecured promise from the company, so its payout timing and credit risk both matter.
- Defined benefit plan
- A pension that pays a set amount for life based on a formula, not on investment results. A military pension is one. You count it as income when deciding how much your portfolio has to cover.
- Direct rollover
- A transfer of retirement money straight from one plan or IRA to another, without a check made out to you. It avoids withholding and the 60-day clock. Most TSP rollovers should go this way.
E
- Expense ratio
- The yearly cost of owning a fund, shown as a percentage of the amount invested. A 0.45 percent difference on $600,000 is $2,700 a year. Compare it before moving money out of low-cost TSP funds.
F
- Full retirement age (FRA)
- The age at which you receive your full Social Security benefit. It is age 67 for anyone born in 1960 or later. Claiming earlier permanently reduces the monthly check.
H
- Health savings account (HSA)
- A tax-advantaged account for medical costs, paired with a qualifying high-deductible health plan. The 2026 limit is $4,400 self-only or $8,750 family. Second-career employees may gain access to one that TRICARE alone doesn't offer.
I
- Income draws
- The money you take out of savings to cover spending in retirement. Their order and size decide your tax bill. At Edgepoint Wealth Management, income draws are set first, and investments are chosen afterward to support them.
- Individual retirement account (IRA)
- A personal retirement account, either traditional (pre-tax) or Roth (after-tax). The 2026 combined contribution limit is $7,500, plus $1,100 at age 50 or older. Many TSP rollovers end up here.
- Inflation risk
- The chance that rising prices erode what your money buys. A fixed $5,000 a month buys noticeably less after 20 years of rising prices. Military pensions adjust annually, but a portfolio's cash may not.
- IRMAA
- The income-related monthly adjustment amount, a surcharge on Medicare Part B and Part D premiums for higher earners. It is set from your income two years earlier. A large Roth conversion can push you into a higher tier.
M
- Military retired pay
- The lifetime monthly payment earned through qualifying service. It is taxable federally in most cases, unlike VA disability compensation. Your state may treat it differently, so check your state's rules.
- Military retirement planning
- Deciding how a military pension, VA benefits, the TSP and a second-career income fit together after service. Edgepoint Wealth Management starts with the monthly income you need, then checks that your accounts can supply it.
- Modified adjusted gross income (MAGI)
- Your adjusted gross income with certain deductions added back. Medicare surcharges and Roth IRA eligibility both use it. In 2026, the Roth phase-out for single filers starts at $153,000.
P
- Plan administrator
- The organization that runs a retirement plan and processes transactions. For the TSP, it is the Federal Retirement Thrift Investment Board. Rollover paperwork usually goes through the administrator, and it can take several weeks.
R
- Required minimum distribution (RMD)
- The amount you must take from pre-tax retirement accounts each year once you reach the starting age. It is age 73, or age 75 if you were born in 1960 or later. Missing one triggers a tax penalty.
- Roth conversion
- A move of money from a pre-tax account to a Roth account, with the converted amount taxed as income that year. Converting $40,000 adds $40,000 to taxable income. Low-income years right after service are common windows.
- Roth TSP
- The after-tax side of the Thrift Savings Plan. Contributions are taxed now, and qualified withdrawals come out tax-free later. The 2026 employee limit is $24,500 across traditional and Roth combined.
S
- Safe withdrawal rate
- A rule of thumb for the share of a portfolio you can draw each year without running out. Common starting points are 4 percent, but it is not a guarantee. A pension lets many veterans start lower.
- Sequence-of-returns risk
- The danger that a market drop early in retirement hurts far more than the same drop later, because you are selling shares while prices are low. Holding cash for near-term income draws softens it.
- Standard deduction
- The flat amount subtracted from income before tax if you don't itemize. For 2026 it is $16,100 single and $32,200 married filing jointly. Pension income can fill much of it.
- Survivor Benefit Plan (SBP)
- A military program that pays a surviving spouse or other eligible person a monthly amount after a retiree dies. It costs a premium from retired pay. Decide with the whole income picture, since the choice is hard to undo.
T
- Tax planning for veterans
- Looking at your pension, VA benefits, TSP draws and second-career pay together to decide which dollars to take and when. Edgepoint Wealth Management estimates the tax cost of a move before suggesting it.
- Tax-deferred account
- An account where you pay no tax on contributions or growth until you take money out. Traditional TSP and traditional IRAs are examples. Every dollar drawn later counts as ordinary income.
- Thrift Savings Plan (TSP)
- The federal government's defined contribution plan for service members and federal employees, with traditional and Roth options. The 2026 employee limit is $24,500, plus $8,000 at age 50 or older.
- Total defined contribution limit
- The cap on all money going into one employer plan in a year, from you and your employer together. For 2026 it is $72,000. It matters for second-career employees with generous matches or profit sharing.
- Traditional IRA
- An individual retirement account funded with money that may be tax-deductible now. Withdrawals are taxed as ordinary income, and RMDs apply later. A rolled-over TSP balance often lands in one.
- TRICARE for Life
- Health coverage for military retirees that works alongside Medicare once you are eligible. It generally requires you to enroll in Medicare Part B. That adds a premium of $202.90 a month in 2026 at standard income levels.
- TSP rollover
- Moving a TSP balance into an IRA or another employer plan. You may keep it in the TSP, so the choice depends on fund costs, fund choices and your income draws. Weigh it before you leave service.
V
- VA disability compensation
- A monthly, tax-free payment for service-connected conditions, rated by percentage. It isn't counted as taxable income, which helps keep brackets and Medicare premiums lower. Include it in income estimates as steady, inflation-adjusted cash flow.