Payment of interest and dividends earned on a fund's portfolio of securities after operating expenses are deducted.

Income Fund

A common trust fund or mutual fund that primarily seeks current income rather than growth of capital. It will tend to invest stocks and bonds that normally pay high dividends and interest.

Income Investment

An investment whose main objective is to generate income in the form of interest or dividend payments, rather than to grow your principal. A bond fund, for example, is an income investment.

Income Statement

The financial statement of a firm that summarizes revenues and expenses over a specified time period; a statement of profit and loss.

Index

A statistical model that serves as a handy reference for judging how well an investment is performing.

Index Fund

A mutual fund that buys the stocks or bonds that make up a widely used market index. The goal of an index fund is to mirror market performance.

Indirect Rollover

A transfer of cash or other property between qualified plans or IRAs in which the owner takes temporary receipt of the funds. The rollover is tax-free and without penalty if completed by the 60th day after the distribution from an IRA or an employer plan.

Individually Designed, or Custom-Designed Plan

A retirement plan that is drafted to meet the specific needs of a particular sponsoring employer. Individually designed plans are not approved by the IRS.

Individual Retirement Account (IRA)

A special custodial or trust account implemented through brokerage firms, banks, insurance companies, mutual funds, and various other financial institutions. In all cases, earnings accumulate within an IRA on a tax-deferred basis. In some cases, the amount of the individual's contribution to an IRA is deductible from his or her current taxable income.

Individual Retirement Account (IRA) Rollover

A provision in the IRA law allowing individuals who receive lump-sum payments from pension or profit-sharing plans to "rollover" into, or invest that sum in, an IRA. IRA funds can be "rolled over" from one investment to another.

Inflation

The loss of purchasing power due to a general rise in the prices of goods and services.

Inflation Risk

The possibility that increases the cost of living will reduce or eliminate investment returns.

Insider Trading

Trading by management or others who have special access to unpublished information. If the information is used to illegally make a profit, there may be large fines and possible jail sentences.

Installation Rate

The fee assessed for the implementation of a new plan.

Integration

A pension design tool in which contributions reflect the existence of Social Security benefits. In this process, FICA taxes are considered part of the contribution to the pension fund. Since Social Security provides a greater percentage benefit to lower paid employees, integration allows the company to increase contributions to higher paid employees.

Integration Level (or Integration Point)

The point at which the compensation of an individual plan participant is divided into base compensation and excess compensation for the purpose of integrating a qualified plan. Typically, the Social Security wage base.

Interest

What a borrower pays a lender for the use of the money. This is the income you receive from a bond, note, certificate of deposit, or other form of IOU.

Investment Advisor

A person who manages assets, making portfolio composition and individual security selection decisions, for a fee, usually a percentage of assets invested.

Investment Objective

The goal of a separate account or mutual fund, and is used to help determine the type of investments that the fund will buy.

Investment Policy

A coherent set of guidelines for managing financial assets in line with stated objectives and the realities of investment markets.

IRS 1099R

Report to the IRS of participant distribution (termination, disability, retirement, 70 ½ minimum distribution, death)