What is a Fixed Income?
A fixed income can have several definitions. It can be defined as a secure and unchanging rate on an investment. For example, some people purchase bonds, and derive a secure rate of income from them. This is generally a low interest rate on the bonds purchased, but it is additionally a guaranteed and static rate of return. Essentially any investment with a guaranteed rate of return is a fixed income. Mostly when people hear the term fixed income, they’re inclined to think it refers to a pension payment or a social security income that is fixed to a specific amount. This is usually what people mean when they say they are on a fixed income. In other words, without making additional investments that would secure more income, or without working, the person receives only their pension or the social security income—sometimes both, so the income does not rise or fall. As many of the elderly are finding, without a significant fixed income, living can get very challenging. The income doesn’t ri
Related Questions
- My wife does not work outside our home and therefore will not have pension income that normally results from employment income. How can we set up a retirement income plan for her?
- Why do index-based fixed-income ETFs sometimes trade at a premium to NAV during days when the fixed income markets are closed?
- What is a Fixed Income?
