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Glossary of Terms:  Q - R

This glossary covers terms related to retirement (including financial, insurance, legal and estate planning) and elder care. (For terms related to Medicare, click on Medicare Glossary.) To reduce download time, we have divided the Glossary into the following sections. Simply click on the section you want to see.

| A | B | C | D | E-F | G | H | I | J-L | M-N | O-P | Q-R | S | T-Z |

Q

Qualified Long-Term Care Insurance Policy — A policy that conforms to federal law and, as a result, offers potential federal tax advantages for some people. Sometimes referred to as a Tax-Qualified Long-Term Care Insurance Policy.

Qualified Long-Term Care Services — Defined by federal law, these are necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, and rehabilitative services, and maintenance or personal care services, that are required by a chronically ill individual, and are provided pursuant to a plan of care prescribed by a licensed health care practitioner. Maintenance or personal care services means any care the primary purpose of which is to provide needed assistance with any of the disabilities as a result of which the individual is a chronically ill individual (including the protection from threats to health and safety due to severe cognitive impairment).

Qualified Retirement Plan — A plan that conforms to federal law. As a result, an employer and its employees can make before-tax contributions into the plan, with the contributions growing tax-free until retirement or termination of employment. As he or she receives retirement benefits from the plan, ordinary income taxes are paid by the employee on the entire amount of each benefit payment. Ordinary income taxes are also payable by the employee if, following termination of employment prior to retirement, he or she cashes out the retirement plan by taking a lump sum payment. These taxes can be deferred, however, if the terminating employee rolls over all benefits into an IRA account within 60 days of receiving the lump sum payment.

R

Real Estate Investment Trust (REIT) — A REIT invests in real estate and/or in mortgages secured by real estate. A REIT issues shares that can be purchased or sold on the open market.

Record Date — The date established by an issuer of a stock, bond, or other security for the purpose of determining the holders who are entitled to receive a dividend or distribution. If you purchased a stock, bond or other security before the record date, and

Reduced Paid-up Benefits — see Nonforfeiture Benefits.

Registered Bond — A bond that is issued as a physical certificate that is delivered to a specifically-named owner who is registered with the bond trustee. If the bond is lost, the registered owner can get the certificate replaced by paying a small fee.

Reinstatement — If a long-term care insurance policy lapses as a result of the insured person's cognitive impairment, it can usually be reinstated in most states retroactive to the date of lapse as though no lapse occurred, with no application required for reinstatement. The request for reinstatement must be made to the insurance company within six months following the date of lapse; the insurance company's requirements for cognitive impairment must be met; and all past due premiums must be paid.

Remainderman — The person who receives the principal remaining in a trust account after all other required payments have been made, such as those to the beneficiary and expenses, and the trust has been dissolved.

Replacement Cost Insurance — Insurance that pays the full amount needed to replace damaged property with similar new property, without taking into account the depreciated value or fair market value of the damaged property.

Rescind — When the insurance company cancels a policy retroactive to its effective date, usually because of misrepresentation, fraud, or illegal procedure. Legally, it is though the policy was never issued.

Residential Care Facility — A generic term for a group home, specialized apartment complex or other institution that provides care services where individuals live. The term is used to refer to a range of residential care options including assisted living facilities, board and care homes and skilled nursing facilities. For more information, click on Assisted Living.

Respite Care — Temporary or periodic care provided by a third party for people with disabilities, illnesses, dementia or other health problems while their usual caregivers take an occasional break from their caregiving responsibilities. Respite care can be provided at home, in the community (e.g., adult day care centers or special respite programs) or overnight in a facility such as a nursing home or assisted living residence.

Reverse Mortgage — A mortgage agreement that allows a homeowner to borrow against their home's equity and receive tax-free payments in the form of a monthly annuity. With a reverse mortgage, you remain the owner of your home just like when you had a regular mortgage. You are still responsible for paying your property taxes and homeowners insurance, and for making property repairs.

When the loan is over, you or your heirs must repay all of the payments you received plus interest. (Reputable lenders don't want your house; they want repayment.) All reverse mortgages are due and payable when the last surviving borrower dies, sells the home, or permanently moves out of the home. (Typically, a "permanent move" means that neither you nor any other co-borrower has lived in your home for one year.) For more information, visit AARP's Reverse Mortgage Guide for Consumers.

Revocable Trust — A trust in which a Grantor reserves the right to revoke or change. To protect the final wishes of the Grantor, a trust can become irrevocable upon the death of the Grantor.

Rider — An addition to an insurance policy that changes the provisions of the policy.

Roth IRA — An Individual Retirement Account that allows taxpayers to contribute up to $2,000 per year, and to withdraw the principal and earnings totally tax-free under certain conditions. Unlike a traditional IRA, a taxpayer cannot take a tax deduction for his or her contributions to a Roth IRA plan. Unlike payments that are withdrawn tax-free from a Roth IRA plan, payments withdrawn from a traditional IRA plan are fully taxable as income.

Roth 401(k) — Like a Roth IRA, contributions will be made with after-tax dollars. While you won't get an upfront tax deduction, the account will grow tax-free, and withdrawals taken during retirement will not be subject to income tax, if you are at least 59 1/2 and you've held the account for five years or more. Important Note: The maximum contribution limits apply to contributions to both types of 401(k) plans. In other words, you can't save $15,000 in a regular 401(k) and another $15,000 in a Roth 401(k).

Round Lot — A trading order for exactly 100 shares of stock. Compare with Odd Lot.

Rule of 72 — A formula to determine the length of time (in years) that it will take for invested money to double at a given compound interest rate. Simply divide 72 by the interest rate to determine the number of years.

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