What Is a Simplified Employee Pension (SEP)? A simplified employee pension (SEP) is an individual retirement account (IRA) that an employer or a self-employed person can establish. The employer is allowed a tax deduction for contributions made to a SEP IRA and makes contributions to each eligible employee’s plan on a discretionary basis. Additionally, under
What Is a Separate Account? A separate account is an investment portfolio owned by an investor and managed by a professional investment firm—typically registered investment advisors (RIA). Although separate accounts are usually opened through a brokerage or financial advisor, they may also be held at a bank or opened with an insurance company. Sometimes these accounts are
What Is a Separate Return? A separate return is a Form 1040 or similar tax form filed by married taxpayers who are separately filing taxes with their spouses. Separate returns are commonly associated with married couples who have initiated divorce proceedings, or with married partners who dwell in separate residences. Key Takeaways A separate return is
What Is Separation of Powers? Separation of powers is an organizational structure where responsibilities, authorities, and powers are divided between groups rather than being centrally held. Separation of powers is most closely associated with political systems, in which the legislative, executive, and judicial powers of government are vested in separate bodies. Key Takeaways Separation of
What Is the September Effect? The September effect refers to the historically weak stock market returns observed during the month of September. In fact, September has been the worst performing month, on average, going back nearly a century. The September Effect is a case of a calendar-based market anomaly, in the sense that it occurs without
What Is Sequential Growth? Sequential growth is a measure of a company’s short-term financial performance that compares the results in a recent period to those of the period immediately preceding it. In financial reporting, sequential growth often compares results between two quarters. A company might report 3% sequential sales growth, meaning that its revenue has
What Is a Sequestered Account? A sequestered account is a deposit account that is seized through legal action or court order. Funds cannot be removed from a sequestered account without the approval of the seizing party. Sequestered accounts are usually separated from other accounts and kept in a separate file. The term sequestered account is
What Is Sequestration? Sequestration is a term adopted by Congress to describe a backup fiscal policy mechanism to enforce budgetary discipline over agreed-upon deficit reduction targets established under the 2011 Budget Control Act (BCA). Sequestration, or “the sequester,” is a procedure by which planned spending increases are moderated by pre-specified percentages if Congress fails to
What Is a Serial Bond? A serial bond is a bond issue that is structured so that a portion of the outstanding bonds mature at regular intervals until all of the bonds have matured. Because the bonds mature gradually over a period of years, these bonds are used to finance projects that provide a consistent
What Is a Serial Bond With Balloon? A serial bond with balloon is a bond for which portions of the total principal amount mature at staggered intervals and have a final payment significantly larger than the previous ones, called the balloon, owed at the end of the issue’s life. A combination of a serial bond
