Glossary
The words behind your grades.
Every term on your financial report card, defined in plain English — no jargon defined with more jargon.
- Financial report card
- A graded summary of a household's whole financial life. Savology grades retirement readiness, savings, insurance coverage, debt, estate planning, income, and net worth, gives each a letter grade, and pairs the grades with prioritized action items. The short survey produces one in about three minutes.
- Retirement readiness
- Whether your current savings rate and assets are on track to replace enough of your income in retirement. It is a projection, not a balance: two households with identical account balances can have very different readiness depending on age, income, and how much they save each year.
- Savings rate
- The share of gross income you save each year, including employer retirement contributions. It is the single most controllable retirement variable — more predictive of long-term outcomes than investment selection, because it compounds over every year you keep it up.
- Emergency fund
- Cash set aside for unplanned expenses and income interruptions, held somewhere you can reach within days. The common guideline is three to six months of essential expenses, but the right target depends on income stability, dependents, and what other liquidity you have.
- Net worth
- Everything you own minus everything you owe. It is the truest single measure of financial position because it nets assets against liabilities — a high income with high debt can produce a lower net worth than a modest income with none.
- Income replacement percentage
- The share of your pre-retirement income your plan needs to reproduce after you stop working. It exists because retirement spending is rarely the same as working spending — some costs end, others begin.
- Disability insurance
- Coverage that replaces a portion of your income if illness or injury prevents you from working. It is the most commonly overlooked coverage in a financial plan, because most households insure their possessions and their death but not their ability to earn.
- Term life insurance
- Life insurance that covers a set number of years and pays only if you die during that term. It is the least expensive way to cover a temporary need, such as the years until a mortgage is paid or children are grown.
- Guardianship nomination
- The legal designation naming who would raise your minor children if you could not. Without one, a court decides. It is often the single most consequential estate planning step for a household with young children, and one of the least expensive.
- Beneficiary designation
- The named recipient on a retirement account or insurance policy. Designations pass property directly and generally override what a will says, which is why an outdated one is among the most common estate planning errors.
- Estate plan
- The documents directing what happens to your property, your dependents, and your medical decisions. A basic plan typically includes a will, guardianship nominations if you have children, powers of attorney, and current beneficiary designations.
- Middle market
- Households with real financial complexity — mortgages, retirement accounts, insurance needs, education costs — whose investable assets fall below the minimums most advisory firms require. They are the majority of households and the least served by traditional advice.
- Mass affluent
- Households whose investable assets are accumulating meaningfully but who sit below high-net-worth thresholds, often with much of their wealth inside workplace retirement plans. They are frequently under-served because their assets are not yet billable under traditional models.
- Fiduciary
- A professional legally obligated to act in your best interest rather than merely recommending something suitable. The distinction matters most when a recommendation could pay the professional differently depending on which product you choose.
- CFP® professional
- A CERTIFIED FINANCIAL PLANNER® professional: someone who has met the CFP Board's education, examination, experience, and ethics requirements. The marks are awarded and enforced by CFP Board.
- Financial wellness benefit
- An employer-provided benefit that helps employees manage personal finances. The ones that get used deliver a personal result quickly and keep employee financial data away from the employer; the ones that go unused are usually content libraries.