Retirement Tax Glossary

The tax rate applied to the next dollar of ordinary income, not the rate applied to every dollar you earned during the year.

A broader average measure of tax paid relative to income. It is useful, but it does not answer the same question as the marginal rate.

A movement of dollars from a pre-tax retirement account into a Roth account, generally creating taxable ordinary income in the year of conversion.

An income-related Medicare premium adjustment that can increase premiums when income crosses specified thresholds.

A required minimum distribution: the minimum amount that generally must be withdrawn from certain retirement accounts once the rules require it.

The idea that long-term capital gains are evaluated in the context of other income, especially ordinary income that occupies lower layers first.

Modified adjusted gross income. The exact definition depends on the rule being applied, which is why it should never be assumed to mean the same thing everywhere.

The amount of additional ordinary income that can be recognized before the next marginal bracket begins to apply to the next dollar.