What Is the Retention Ratio? The retention ratio is the proportion of earnings kept back in the business as retained earnings. The retention ratio refers to the percentage of net income that is retained to grow the business, rather than being paid out as dividends. It is the opposite of the payout ratio, which measures
What Are Retired Securities? Retired securities have been repurchased by the issuer out of the company’s retained earnings and canceled, according to Securities and Exchange Commission (SEC) regulations. They have no market value and no longer represent a share of ownership in the issuing corporation. Key Takeaways Retired securities have been bought back by the
What Is a Retirement Contribution? Retirement contribution refers to a monetary contribution made to a retirement plan. Retirement contributions can be pretax or after-tax, depending on whether the retirement plan is qualified. Taxpayers can set aside their money to a variety of different retirement accounts but are limited as to how much they can set
What Is a Retirement Income Fund (RIF)? A Retirement Income Fund (RIF) is an investment product available to anyone as a conservative means of saving for retirement. A RIF is generally a mutual fund that is well diversified in large and mid-cap stocks and bonds. A RIF balances its portfolio to allow for moderate gains using
What Is Retirement Planning? Retirement planning involves determining retirement income goals and what’s needed to achieve those goals. Retirement planning includes identifying income sources, sizing up expenses, implementing a savings program, and managing assets and risk. Future cash flows are estimated to gauge whether the retirement income goal is possible. You can start at any
What Is a Retract? To retract means to withdraw a bid, offer, or statement before any relevant party acts on the information provided. For example, it’s common practice in real estate transactions to provide a deposit showing the buyer’s intention to complete the transaction. This deposit is sometimes referred to as earnest money. If the buyer
What is Retractable Bond? Retractable bond, also known as variable-rate demand note, is a debt security that features a put option which allows the holder to force the issuer to redeem the bond before maturity at its face value. Key Takeaways Retractable bond, also known as variable-rate demand note, is a debt security that features
What Is Retrocession? Retrocession refers to kickbacks, trailer fees or finders fees that asset managers pay to advisers or distributors. These payments are often done discreetly and are not disclosed to clients, although they use client funds to pay the fees. Retrocession commission is a heavily criticized fee-sharing arrangement in the financial industry because money flows
What Is a Reserve Currency? A reserve currency is a large quantity of currency maintained by central banks and other major financial institutions to prepare for investments, transactions, and international debt obligations, or to influence their domestic exchange rate. A large percentage of commodities, such as gold and oil, are priced in the reserve currency, causing other
What Is a Reserve Fund? A reserve fund is a savings account or other highly liquid asset set aside by an individual or business to meet any future costs or financial obligations, especially those arising unexpectedly. If the fund is set up to meet the costs of scheduled upgrades, less liquid assets may be used. For
