FIRE words, in plain English

4% rule #Link to 4% rule

A rule of thumb from William Bengen's 1994 study of U.S. market history: withdraw 4% of your portfolio in the first year of retirement, then adjust that dollar amount for inflation each year. With 50% to 75% in stocks, it lasted at least 30 years in every historical period he tested. The 1998 Trinity study reached similar results for 15- to 30-year periods.

Why it matters for FIRE: It's where “spending × 25” comes from. It's based on past U.S. returns, not a promise, and early retirees may need money to last longer than 30 years.

72(t) / SEPP #Link to 72(t) / SEPP

Also called: Substantially equal periodic payments, 72(t)

A way to take money from an IRA (or a former employer's plan) before 59½ without the 10% tax, by taking a series of substantially equal periodic payments calculated with an IRS-approved method. Payments must continue for five years or until 59½, whichever is later. Changing them early can trigger the tax on all past payments, plus interest.

401(k) #Link to 401(k)

A workplace retirement plan offered by many private employers. For 2026, you can defer up to $24,500 of salary (pre-tax and Roth combined), plus catch-up contributions if you're 50 or older and the plan allows them.

Why it matters for FIRE: Contributions come straight from your paycheck, which makes saving automatic, and many employers add a match.

403(b) #Link to 403(b)

A workplace retirement plan for employees of public schools, some nonprofits and certain ministers. It works much like a 401(k) and shares the same 2026 employee limit of $24,500. If you have both a 401(k) and a 403(b), that limit is shared between them.

457(b) #Link to 457(b)

A deferred-compensation plan, mostly offered by state and local governments (and some nonprofits). For 2026 its basic limit is $24,500, and unlike a 401(k) that limit counts employer contributions too. It's separate from the 401(k)/403(b) limit, so someone with both a 403(b) and a 457(b) may be able to contribute to each.

Why it matters for FIRE: Money in a governmental 457(b) can generally be withdrawn after you leave that job without the 10% early withdrawal tax, at any age (ordinary income tax still applies; money rolled in from other plans can be different).

ACA marketplace #Link to ACA marketplace

Also called: Affordable Care Act, HealthCare.gov, Obamacare, Health insurance marketplace

The place to buy individual health insurance under the Affordable Care Act, through HealthCare.gov or your state's own site. Losing job-based coverage opens a special enrollment period.

Why it matters for FIRE: It's where many early retirees get coverage until Medicare. Your income affects what you pay.

Asset allocation #Link to Asset allocation

How your investments are divided between kinds of assets, such as stocks, bonds and cash, for example 80% stocks and 20% bonds.

Why it matters for FIRE: Your mix shapes both your expected growth and how much your balance can swing, which matters most near and in early retirement.

Backdoor Roth #Link to Backdoor Roth

An informal name for making a nondeductible contribution to a traditional IRA and then converting it to a Roth IRA, used by people whose income is too high for a direct Roth contribution. Tax rules, including how other pre-tax IRA money is counted (the pro-rata rule) and Form 8606 reporting, can make it more complicated than it sounds.

Why it matters for FIRE: Worth understanding if your income rises above the Roth limits. Talk to a tax professional before trying it.

Barista FIRE #Link to Barista FIRE

Leaving full-time work once your investments cover most of your costs, and using part-time or flexible work to cover the rest (and, for some, to get health coverage).

Why it matters for FIRE: Part-time income shrinks the portfolio you need, which can bring the date closer.

Bond #Link to Bond

A loan you make to a government or company. In return it usually pays interest and repays the amount at the end of the term. Bonds tend to move less than stocks but can still lose value.

Bridge years #Link to Bridge years

The years between leaving full-time work and when other income starts, such as penalty-free retirement account access, a pension, Social Security or Medicare. People plan how to cover spending and health coverage in that gap.

Why it matters for FIRE: For early retirees, the bridge is often the hardest part of the plan.

Capital gains (and the 0% rate) #Link to Capital gains (and the 0% rate)

Also called: Long-term capital gains, LTCG, 0% bracket

The profit when you sell an investment for more than you paid. Held over a year, it's a long-term gain, taxed at 0%, 15% or 20% depending on income; held a year or less, it's taxed like wages. For 2026, the 0% rate applies while taxable income (including the gains) stays at or below $49,450 single or $98,900 married filing jointly.

Why it matters for FIRE: Early retirees with low taxable income may be able to sell some investments at a 0% federal rate. State taxes may still apply.

Catch-up contributions #Link to Catch-up contributions

Extra contributions allowed from age 50. For 2026: an extra $8,000 in a 401(k), 403(b), governmental 457(b) or the TSP (or $11,250 instead if you're 60 to 63, where the plan allows it), and an extra $1,100 in an IRA.

Coast FIRE #Link to Coast FIRE

Having saved enough early on that, if you added nothing more, growth alone could plausibly carry your investments to your FIRE number by a chosen age. You still work to pay today's bills, but you no longer need to save for retirement.

Why it matters for FIRE: It can let people take a lower-paid job they love, or work less, years before full FI. It depends on assumed returns, which aren't guaranteed.

COBRA #Link to COBRA

A federal law that can let you keep your employer's group health plan after leaving a job, usually for up to 18 months (longer in some situations). You generally pay the full premium yourself, plus up to a 2% fee.

Why it matters for FIRE: It can bridge a gap while you set up other coverage, though it's often expensive.

COLA (cost-of-living adjustment) #Link to COLA (cost-of-living adjustment)

Also called: Cost-of-living adjustment

A yearly increase to a benefit to help it keep up with inflation. Social Security's COLA for 2026 is 2.8%. Pension COLAs depend on the plan; some are capped and some have none.

Why it matters for FIRE: A pension without a full COLA buys less each year, which matters over a long retirement.

Compound growth #Link to Compound growth

Also called: Compound interest, Compounding

Earning returns on your past returns as well as on the money you put in, so growth builds on itself over time.

Why it matters for FIRE: Time does much of the heavy lifting, which is why early saving matters.

Debt avalanche #Link to Debt avalanche

Paying the minimum on every debt, then putting every extra dollar toward the debt with the highest interest rate first. When it's gone, move to the next highest.

Why it matters for FIRE: It usually costs the least interest overall.

Debt snowball #Link to Debt snowball

Paying the minimum on every debt, then putting every extra dollar toward the smallest balance first. When it's gone, roll that payment into the next smallest.

Why it matters for FIRE: Quick wins can keep people motivated, even if it can cost more interest than the avalanche.

Diversification #Link to Diversification

Spreading money across many investments, so one company, industry or country going badly doesn't sink the whole portfolio.

Dividend #Link to Dividend

A share of a company's profits paid to its shareholders, usually in cash. Companies can raise, cut or stop dividends.

Dividend reinvestment plan (DRIP) #Link to Dividend reinvestment plan (DRIP)

Also called: DRIP, Dividend reinvestment

A setting or plan that automatically uses your dividends to buy more shares instead of paying them to you in cash.

Why it matters for FIRE: Reinvesting keeps compounding going. In a regular taxable account, reinvested dividends are generally still taxable that year.

Dollar-cost averaging #Link to Dollar-cost averaging

Investing a fixed amount on a regular schedule, such as every paycheck, whatever the market is doing.

Why it matters for FIRE: It's how most people invest through a workplace plan, and it takes the guesswork out of timing.

Early withdrawal penalty (10% additional tax) #Link to Early withdrawal penalty (10% additional tax)

Also called: Age 59½, 10% penalty

Withdrawals from IRAs and most workplace plans before age 59½ generally owe an extra 10% tax on top of income tax, unless an exception applies.

Why it matters for FIRE: Early retirees plan around it with the exceptions below, Roth contributions, taxable accounts and governmental 457(b) plans.

Emergency fund #Link to Emergency fund

Cash set aside for surprises such as a job loss, a car repair or a medical bill, usually in a savings account you can reach quickly.

Why it matters for FIRE: It keeps a surprise from turning into high-interest debt or forcing you to sell investments at a bad time.

Employer match #Link to Employer match

Money your employer adds to your workplace plan when you contribute, for example 50 cents for each dollar you put in, up to a set share of your pay. Each plan sets its own formula.

Why it matters for FIRE: Many FIRE stories start by contributing at least enough to get the full match.

Exchange-traded fund (ETF) #Link to Exchange-traded fund (ETF)

Also called: ETF

A fund, much like a mutual fund, whose shares trade on a stock exchange throughout the day like a stock.

Expense ratio #Link to Expense ratio

A fund's yearly operating costs, shown as a percentage of what you have invested. It's taken out of the fund's returns, so you never see a bill.

Why it matters for FIRE: Over decades, a small difference in fees can add up to a big difference in what you end up with.

Fat FIRE #Link to Fat FIRE

Reaching financial independence with a comfortable or generous budget. The FIRE number is bigger, so it usually takes longer.

Why it matters for FIRE: More cushion for travel, family and surprises, in exchange for more years of saving.

Fiduciary and fee-only advisor #Link to Fiduciary and fee-only advisor

Also called: Fee-only financial advisor, Investment adviser

A fiduciary is legally required to act in your best interest. Registered investment advisers owe their clients a fiduciary duty. Fee-only describes advisors paid only by their clients, not by commissions on products they sell.

Why it matters for FIRE: Knowing how someone is paid helps you understand their incentives. You can look up advisers on Investor.gov.

Financial independence (FI) #Link to Financial independence (FI)

Also called: FI

Having enough savings, investments or reliable income (such as a pension) to cover your living costs without needing a paycheck.

Why it matters for FIRE: FI is the milestone. What you do with it, retire early, work part-time or keep going on your own terms, is the RE part, and it's up to you.

FIRE #Link to FIRE

Also called: Financial independence, retire early

Short for Financial Independence, Retire Early. It means saving and investing enough that work becomes a choice rather than a necessity, often well before the usual retirement age.

Why it matters for FIRE: For many people the goal isn't to stop working forever. It's to have the freedom to choose what work, if any, fills their days.

FIRE number #Link to FIRE number

Also called: FI number, Financial independence number

A rough target for how much you'd need invested to cover your yearly spending. A common shortcut is yearly spending divided by a withdrawal rate: at 4%, that's spending × 25.

Why it matters for FIRE: It turns a vague dream into a number you can track. It's a starting estimate built on assumptions, not a guarantee.

Full retirement age (FRA) #Link to Full retirement age (FRA)

Also called: FRA

The age you can get your full Social Security retirement benefit: 67 for anyone born in 1960 or later. Claiming at 62 cuts the benefit to 70% of the full amount; waiting past FRA adds 8% a year until 70.

Geoarbitrage #Link to Geoarbitrage

Earning or saving in a higher-cost place and living in a lower-cost one, either in another part of your country or abroad.

Why it matters for FIRE: A lower cost of living lowers your FIRE number. Taxes, health coverage, visas and distance from family all need checking first.

Health savings account (HSA) #Link to Health savings account (HSA)

Also called: HSA

A savings account for medical costs. To contribute, you generally need a qualifying high-deductible health plan, no other disqualifying health coverage, no Medicare enrollment, and you can't be claimed as someone else's dependent. Contributions can be tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are tax-free. 2026 limits: $4,400 self-only, $8,750 family (including employer money), plus $1,000 if you're 55 or older.

Why it matters for FIRE: Some people invest their HSA and pay current medical bills out of pocket, keeping receipts for expenses incurred after the HSA was opened, to reimburse themselves years later.

High-deductible health plan (HDHP) #Link to High-deductible health plan (HDHP)

Also called: HDHP

A health plan with a higher deductible that can qualify you for an HSA. For 2026, the minimum deductible is $1,700 self-only or $3,400 family. Starting in 2026, bronze and catastrophic marketplace plans are also treated as HSA-qualifying.

High-interest debt #Link to High-interest debt

Debt with a high interest rate, such as most credit card balances and some personal loans. Interest keeps adding to what you owe.

Why it matters for FIRE: Paying it down is a guaranteed saving equal to the rate you're charged, which few investments can promise.

High-yield savings account #Link to High-yield savings account

A savings account that pays a higher interest rate than a typical bank account. At FDIC-insured banks, deposits are insured up to $250,000 per depositor, per bank, per ownership category.

Why it matters for FIRE: A common home for an emergency fund or money you'll need soon.

Index fund #Link to Index fund

A mutual fund or ETF that seeks to track a market index, such as the S&P 500 or the whole U.S. stock market, instead of trying to pick winners. Fees, trading costs and tracking error mean results won't match the index exactly.

Why it matters for FIRE: Index funds often have low costs and broad diversification, which is why so many FIRE stories mention them.

Inflation #Link to Inflation

The general rise in prices over time, so a dollar buys less next year than it does today. In the U.S. it's usually measured by the Consumer Price Index (CPI).

Why it matters for FIRE: A long retirement needs income that keeps up with prices, which is why the 4% rule raises withdrawals each year for inflation.

IRA (individual retirement account) #Link to IRA (individual retirement account)

Also called: Individual retirement arrangement, Traditional IRA

A retirement account you open yourself, separate from any job. For 2026 you can contribute up to $7,500 across all your traditional and Roth IRAs ($8,600 if you're 50 or older), and no more than your taxable compensation for the year. A married couple filing jointly can generally count the working spouse's compensation, so a spouse with no earnings of their own can still contribute (a spousal IRA). Depending on income and workplace plan coverage, traditional IRA contributions may be tax-deductible.

Lean FIRE #Link to Lean FIRE

Reaching financial independence on a deliberately modest budget, so the FIRE number is smaller and can be reached sooner.

Why it matters for FIRE: It can bring freedom earlier, with less room in the budget for surprises.

Lifestyle creep #Link to Lifestyle creep

Also called: Lifestyle inflation

When spending quietly rises as income rises, so a raise or bonus disappears into a bigger lifestyle instead of savings.

Why it matters for FIRE: Higher spending raises your FIRE number and lowers your savings rate at the same time.

Marginal tax rate #Link to Marginal tax rate

Also called: Tax bracket, Effective tax rate

The rate you pay on your next dollar of income. U.S. income tax is charged in brackets, so moving into a higher bracket only raises the tax on income within that bracket. Your effective rate is total tax divided by total income, usually much lower.

Medicare #Link to Medicare

Federal health insurance for people 65 and older, and some younger people with certain disabilities or conditions. Part A covers hospital care, Part B doctors and outpatient care, Part D prescriptions. The standard Part B premium for 2026 is $202.90 a month.

Why it matters for FIRE: For early retirees, the years before 65 need another plan for health coverage. Medicare also has costs of its own.

Mutual fund #Link to Mutual fund

A fund that pools money from many investors to buy a basket of investments. You buy and sell shares of the fund, priced once a day after the market closes.

Net worth #Link to Net worth

Everything you own (cash, investments, the market value of your home, other assets) minus everything you owe (mortgage, loans, card balances).

Why it matters for FIRE: Tracking it over time shows whether you're moving toward FI, even in months that feel slow.

Passive income #Link to Passive income

Money that keeps coming in without you trading hours for it, such as dividends, interest, rent or royalties. Most of it takes real work or money up front, and some upkeep after.

Why it matters for FIRE: Income that keeps flowing reduces how much you need to withdraw from investments.

Pension (defined benefit plan) #Link to Pension (defined benefit plan)

Also called: Defined benefit, DB plan

A plan that promises a set monthly income in retirement, usually based on years of service, salary and a formula. Many public servants, such as teachers, police and firefighters, have one.

Why it matters for FIRE: A pension can cover much of your spending, so the savings you need for FIRE may be far smaller.

Premium tax credit (PTC) #Link to Premium tax credit (PTC)

Also called: ACA subsidy, PTC

A tax credit that lowers the cost of marketplace health insurance, based on household income. For 2026, income generally must be between 100% and 400% of the federal poverty level; the temporary rule that removed the 400% limit ended after 2025. If you take the credit in advance, you reconcile it at tax time, and starting in 2026 any excess must be repaid in full.

Why it matters for FIRE: Early retirees often control their taxable income, so how they draw down savings can change what they pay for coverage.

Public safety employee exception #Link to Public safety employee exception

Qualified public safety employees, such as many police officers and firefighters, who separate from service in or after the year they turn 50, or after 25 years of service under the plan, whichever comes first, can take distributions from that governmental plan without the 10% early withdrawal tax. Leaving earlier and simply waiting until 50 doesn't qualify. Plan and job rules matter.

Real return #Link to Real return

Your investment return after subtracting inflation. A 7% return in a year with 3% inflation is roughly a 4% real return.

Why it matters for FIRE: uFIRE's calculators use returns after inflation by default, so results are in today's dollars.

Rebalancing #Link to Rebalancing

Bringing your investment mix back to its target, for example by selling some of what has grown and buying what has lagged, or by directing new money to the part that's below target.

Required minimum distributions (RMDs) #Link to Required minimum distributions (RMDs)

Also called: RMD

Minimum amounts the law requires you to withdraw each year from traditional IRAs and most workplace plans once you reach a set age (73 for many people today). Roth IRAs have no RMDs while the owner is alive.

Roth (Roth IRA and Roth 401(k)) #Link to Roth (Roth IRA and Roth 401(k))

Also called: Roth IRA, Roth 401(k), Designated Roth account

Accounts funded with money you've already paid tax on. Qualified withdrawals, including growth, are tax-free (generally after age 59½ and once the account has met a five-year rule). Direct Roth IRA contributions phase out at higher incomes: for 2026, $153,000–$168,000 of modified AGI for single filers and $242,000–$252,000 for married couples filing jointly.

Why it matters for FIRE: Roth IRA contributions (not earnings) can generally be withdrawn at any time without tax or penalty, which gives early retirees flexibility.

Roth conversion #Link to Roth conversion

Moving money from a traditional (pre-tax) account into a Roth IRA. You generally pay income tax on the pre-tax amount you convert, in the year you convert it.

Why it matters for FIRE: Converting in low-income years, such as early retirement, can mean paying tax at a lower rate than you might later.

Roth conversion ladder #Link to Roth conversion ladder

An early-retirement strategy: convert some traditional money to a Roth IRA each year. Each conversion has its own five-year clock, starting January 1 of the year you convert, after which the converted amount can come out without the 10% early withdrawal tax. A conversion made in 2026 clears its clock on January 1, 2031.

Why it matters for FIRE: It's one way to reach pre-tax savings before 59½. You need other money to live on for the first five years.

Rule of 55 #Link to Rule of 55

If you leave a job during or after the calendar year you turn 55, withdrawals from that employer's 401(k) or 403(b) generally avoid the 10% early withdrawal tax. Leaving earlier and waiting until 55 doesn't qualify, and it doesn't apply to IRAs.

Rule of 72 #Link to Rule of 72

A quick estimate of how long money takes to double: divide 72 by the yearly rate of return. At 8% a year, about 9 years (72 ÷ 8). It's a mental-math shortcut, not a prediction.

Safe withdrawal rate (SWR) #Link to Safe withdrawal rate (SWR)

Also called: SWR, Withdrawal rate

The share of your portfolio you plan to spend each year, chosen so the money is likely to last. “Safe” is a hope based on history, not a guarantee. uFIRE's calculators start at 4%; some people pick a lower rate, such as 3.5%, for a longer retirement.

Why it matters for FIRE: A lower rate means a bigger FIRE number but more cushion; a higher rate means a smaller number and more risk of running short.

Savings rate #Link to Savings rate

The share of your income you save and invest. One common version: (take-home pay − spending) ÷ take-home pay. If you leave out payroll contributions such as 401(k) savings, add them back to both the savings and the income.

Why it matters for FIRE: It works on both sides at once: saving more grows your investments, and spending less shrinks the number you need. That's why it drives how long FIRE takes.

Self-employment tax #Link to Self-employment tax

The Social Security and Medicare tax people pay on their own business income: 15.3%, generally applied to 92.35% of net earnings, with the Social Security part stopping at a yearly wage cap.

Why it matters for FIRE: It's why side-hustle and business income needs tax planning, and why self-employed people often pay estimated taxes.

SEP IRA #Link to SEP IRA

Also called: Simplified employee pension

A simple retirement plan for self-employed people and small businesses, funded by employer contributions. For 2026, generally up to 25% of compensation or $72,000, whichever is less, with a special calculation for the self-employed. There are no age-based catch-ups for SEP contributions.

Sequence-of-returns risk #Link to Sequence-of-returns risk

Also called: Sequence risk

The risk that bad market years arrive early in retirement, while you're withdrawing. Selling investments when prices are down can leave less to recover, even if average returns over the whole period turn out fine.

Why it matters for FIRE: It's one of the main reasons people keep a cash buffer, stay flexible with spending, or plan for part-time income in the first years.

Side hustle #Link to Side hustle

Paid work on the side of a main job, such as freelancing, a trade on weekends or a small online business.

Why it matters for FIRE: Extra income can raise your savings rate. Self-employment income usually has no tax withheld, so taxes need planning.

Social Security #Link to Social Security

The U.S. federal program that pays retirement, disability and survivor benefits based on your work history. You can start retirement benefits as early as 62, with a reduced amount.

Why it matters for FIRE: Retiring early can mean fewer years of earnings in your record. Your my Social Security account shows your estimates; early retirees should check what future earnings it assumes.

Social Security earnings test #Link to Social Security earnings test

If you claim Social Security before full retirement age and keep working, some benefits are temporarily withheld above a limit. For 2026, if you're under FRA all year: $1 for every $2 earned over $24,480. In the year you reach FRA: $1 for every $3 earned over $65,160, counting only earnings before the month you reach FRA. From that month on, there's no limit. Pensions and investment income don't count, and benefits are recalculated at FRA.

Social Security Fairness Act (WEP and GPO repeal) #Link to Social Security Fairness Act (WEP and GPO repeal)

Also called: WEP, GPO, Windfall Elimination Provision, Government Pension Offset

A law signed January 5, 2025 that repealed the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) for benefits payable from January 2024 onward. They used to reduce Social Security for many people with a pension from work not covered by Social Security, including many teachers, police and firefighters.

Why it matters for FIRE: If your plan assumed a reduced Social Security benefit because of a public pension, it may be worth updating your numbers.

Solo 401(k) #Link to Solo 401(k)

Also called: One-participant 401(k), Individual 401(k)

A 401(k) for a business owner with no employees (other than a spouse). You can contribute as both employee and employer. For 2026 the total is generally capped at $72,000 plus any catch-up, with special math for self-employed income.

Standard deduction #Link to Standard deduction

An amount of income the federal government doesn't tax, if you don't itemize. For 2026: $16,100 single, $32,200 married filing jointly, $24,150 head of household.

Why it matters for FIRE: In early retirement, this income can sometimes be used for tax-free Roth conversions or withdrawals.

Stock #Link to Stock

Also called: Shares, Equities

A small piece of ownership in a company. Stock prices can rise and fall a lot, and some companies pay part of their profits as dividends.

Target-date fund #Link to Target-date fund

A single fund that holds a mix of investments, often through other funds, and gradually becomes more conservative as a chosen year (the “target date”) approaches. The mix and the fees vary a lot between providers.

Tax-advantaged account #Link to Tax-advantaged account

An account the tax law treats specially to encourage saving, such as a 401(k), 403(b), 457(b), IRA or HSA. Depending on the type, you get a tax break now, tax-free growth later, or both, usually with limits and rules about when you can withdraw.

Tax-loss harvesting #Link to Tax-loss harvesting

Selling an investment in a taxable account at a loss to offset capital gains, and up to $3,000 a year of ordinary income ($1,500 if married filing separately). Unused losses carry forward to future years.

Why it matters for FIRE: It can lower taxes, but watch the wash sale rule.

Thrift Savings Plan (TSP) #Link to Thrift Savings Plan (TSP)

Also called: TSP

The workplace retirement plan for federal employees and members of the uniformed services. It works much like a 401(k), with the same 2026 employee deferral limit of $24,500.

Traditional (pre-tax) contributions #Link to Traditional (pre-tax) contributions

Also called: Pre-tax, Tax-deferred

Money that goes in before income tax (or is deducted), grows without yearly tax, and is taxed as ordinary income when you withdraw it.

Why it matters for FIRE: It lowers your taxes now. Many early retirees expect to be in a lower bracket later, which is part of the logic of a Roth conversion ladder.

The uFIRE Hearth #Link to The uFIRE Hearth

Also called: Hearth, Purpose

uFIRE's simple framework for what you retire to: six areas of a good life, Hands, Energy, Adventure, Roots, Tend and Heart. A free self-check lets you rate each one; your answers stay on your device.

Why it matters for FIRE: Money is the fuel; purpose is the hearth. Knowing what the saving years are for can make them easier.

Vesting #Link to Vesting

When money in a workplace plan becomes fully yours. Your own contributions are always 100% vested; employer contributions may vest over several years of service, depending on the plan.

Why it matters for FIRE: Leaving a job just before a vesting date can mean leaving employer money behind.

Wash sale #Link to Wash sale

Selling stock or securities at a loss and buying substantially identical ones within 30 days before or after the sale. In a taxable account the loss can't be deducted then; it's generally added to the cost basis of the new shares, so it's deferred rather than lost. If the replacement is bought in your IRA or Roth IRA, the loss is disallowed and doesn't increase your IRA's basis, so it's effectively lost.