The Retirement Corporation of America

Glossary

ABCDEFGHIJKLMNOPQRSTUVWX-Y-Z

D


Defined Benefit Plan

A qualified retirement plan under which a retiring employee will receive a guaranteed retirement fund, usually payable in installments. Annual contributions may be made to the plan by the employer at the level needed to fund the benefit. The annual contributions are limited to a specified amount, indexed for inflation.

Depreciation
The decrease or loss in value of an asset.

Diversification
Investing in different companies, industries, or asset classes. Diversification may also mean the participation of a large corporation in a wide range of business activities.

Dividend
A pro rata portion of earnings distributed in cash by a corporation to its stockholders. In preferred stock, dividends are usually fixed; with common shares, dividends may vary with the fortunes of the company.