Glossary
The words that come up when you look at your future across New Zealand, Australia and the United States, each defined in a sentence or two. Every term links to the guides that use it.
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A
Access age
The age from which money in a retirement savings account is yours to take out.
Age Pension
Australia's government pension.
Age Pension means test
Australia tests the Age Pension twice, on what you own and on what you earn, and pays the lower answer.
Alien nonpayment
The United States rule that stops Social Security for anyone who is not a US citizen after six full calendar months outside the country.
Applicable fund earnings
The part of money coming out of a foreign super fund that Australia taxes.
Australian resident
For Australian social security, someone who resides in Australia and holds the right status.
Australian super
Australia's workplace retirement savings. The duty sits with the employer rather than with you, so someone who never thinks about super still builds one.
B
Balanced fund
A fund less volatile than a growth fund, but more likely to grow in value over the longer term than a conservative one.
Beneficiary
Whoever is set down to receive what is in an account after its holder dies.
Binding death benefit nomination
An instruction to an Australian super fund about who receives your death benefit that the trustee has to follow.
C
Centrelink
The name Australia's social security payments go out under.
Compassionate grounds
One of the ways Australian super can come out early, decided by the tax office rather than by your fund.
Condition of release
Something that has to be true before money in an Australian super fund can be paid out to you.
Contributions
What goes into a retirement savings account from your pay each year, as a share of your salary before tax.
D
De-risking
Moving savings into safer, lower-growth investments in the years before you can access them, so a market drop right before you need the money hurts less.
Deeming
How Australia's Age Pension income test treats financial investments: it assumes they earn a set rate of income, no matter what they actually earn.
Dependant
Someone who depends on you, and who a fund can pay after you die.
Double tax agreement
An agreement between two countries deciding which of them may tax a given kind of income. Inland Revenue warn that one can change how you are taxed.
E
F
FBAR
The report a US person files with the Treasury when their foreign financial accounts together came to more than $10,000 at any time in the year.
Foreign earned income exclusion
A way for a United States taxpayer living abroad to leave some of their foreign wages out of their US taxable income.
Foreign superannuation
New Zealand's tax category for retirement savings built up overseas.
Foreign tax credit
Counting tax you paid another country against the United States tax on the same income.
Form 8938
The FATCA report of specified foreign financial assets, which travels with a United States tax return.
Free area
The amount of income Australia's Age Pension income test ignores before it starts reducing the payment at all.
Full retirement age
The age at which United States Social Security pays a benefit in full, which is 67 for anyone born in 1960 or later.
G
I
Income stream
Regular payments out of an Australian super fund, as opposed to taking the money as a lump sum.
Indexation
Government pensions rising over time instead of staying at today's amount.
Intestacy
Dying without a will, so a table in the Administration Act 1969 decides who takes what.
IRA
An individual retirement arrangement: an account you open yourself in the United States, rather than one an employer offers.
K
L
M
N
O
P
Personal representative
Your executor or administrator: the person who deals with your estate after you die.
Present long term
Being physically in a country and either having been there 26 weeks already, or intending to stay a year or more.
Preservation age
The age from which you can take money out of Australian super once you have retired.
Primary insurance amount
The monthly United States Social Security payment the formula produces at full retirement age.
Q
R
Required minimum distributions
Withdrawals the United States makes you start taking from a traditional retirement account from 73, whether or not you need the money that year.
Resident alien
Someone who is not a United States citizen but is treated as a US resident for tax, which includes green card holders.
Resident and present
The test behind New Zealand Superannuation's residence rule.
Risk indicator
The 1 to 7 rating every managed fund in New Zealand has to show, reflecting how much the value of the fund's assets goes up and down.
Rollover
Moving money out of one United States retirement plan and into another within 60 days, without paying tax on it.
Roth
A tax treatment rather than a kind of account.
S
Saving clause
The part of an American tax treaty that lets the United States tax its own citizens and residents as though the treaty had never come into force.
Schedule method and formula method
The two ways New Zealand taxes a lump sum out of a foreign retirement scheme once the four year window at the start of your tax residence is up.
Sequence of returns
The order good and bad years arrive in, as distinct from the average. While you are still adding money the order makes very little difference.
Serious illness
A ground for taking the whole of a KiwiSaver balance out early, and it has a strict meaning in the Act.
Significant financial hardship
One of the grounds for taking KiwiSaver money out early.
Social security agreement
A treaty between two countries that shares responsibility for social security, so a working life split between them does not leave you short in both.
Social Security claim age
When you start taking Social Security. Earlier means a smaller payment for life; later means a bigger one.
Social Security credits
What the United States counts instead of years of residence.
Social Security trust fund shortfall
The Social Security trust fund is projected to run down around 2032, which would trigger an automatic cut of roughly 22% to 28% unless Congress acts.
Special Banking Option
The two ways an overseas pension can reach you while you live in New Zealand. The choice changes your tax position rather than your total.
Special Category visa
The visa a New Zealand citizen is normally granted on arriving in Australia on a New Zealand passport, with no application in advance.
Super death benefit
What an Australian super fund pays out when a member dies: their remaining super and any insurance benefit.
Super guarantee
The super an Australian employer must pay for an eligible employee, on top of their wages and whatever the employee does themselves.
Survivor benefits
Monthly United States Social Security payments to eligible family members of someone who worked and paid Social Security taxes before they died.
T
Taper
Bringing a payment down gradually as income or assets rise, instead of stopping it at a line.
Target date fund
An American fund holding a mix of shares, bonds and other investments that changes automatically as its holders age.
Tax on 401(k) and IRA withdrawals
Money taken out of a 401(k) or traditional IRA counts as income and is taxed.
Tax resident
Being treated by a country's tax system as living there, which is what decides how it taxes you. New Zealand runs on residence.
The bridge
Years between stopping work and your accounts opening up, when only cash and income can cover you.
Today's dollars
Two ways of showing an amount of money in a future year. Today's dollars: what the money is worth in today's buying power.
Totalisation
Counting time in one country towards a pension in another, under an agreement between the two, to help you meet a residence or work requirement.
Trans-Tasman retirement savings portability
The route retirement savings can take between KiwiSaver and an Australian super fund when you move between the two countries.
Transfer balance cap
A lifetime limit on how much Australian super can move into a retirement phase account, where the fund's investment earnings are not taxed.
U
V
W
Windfall Elimination Provision
A rule that used to cut United States Social Security for someone who also received a pension from work that had not paid into the US system.
Withdrawal rate
The share of your savings you take out in a year.
Withholding
Tax held back from a payment before it reaches you, counting towards the tax you will owe rather than settling it.
Work Bonus
An Australian allowance that keeps some of what you earn from work out of the Age Pension income test.
Working age residence
Time living in a country from age 20 up to pension age, counted to a maximum of 45 years.