Your Retirement Reality Tip
Income from non-guaranteed sources is sometimes called “variable” income, while a guaranteed income payment is often referred to as “fixed” income.
Guaranteed Income: Defined-Benefit Pensions, Reverse Mortgages, Annuities, and More
Guaranteed income can be generated from several sources and is by no means rare. Social Security is currently the most expansive program that provides guaranteed income. At a time when poverty ran rampant, the program was designed to provide assistance for older adults who were struggling financially. It was never intended to be the only source of income in retirement. Therefore, when planning for retirement, social security should only be relied upon for a portion of your income needs.
Private sources of guaranteed income can include:
- Company defined benefit pensions
- Reverse mortgages
- Bond portfolios
- Certificates of deposit (CDs)
Each has its own benefits and drawbacks—no one source of guaranteed income is right for everyone. Learn about each source of guaranteed income in detail, about guaranteed retirement income benefits, and investigate the risks involved.
Guaranteed Income Sources versus Non-Guaranteed Income Sources
Income from each source has its pros and cons. For most people, a combination of guaranteed and non-guaranteed income provides both flexibility and reliability during retirement. Whether choosing to have more income from guaranteed sources or non-guaranteed sources, what’s important is that you plan taking into account all the possible scenarios.