What is a Fixed Income?

Fixed income is an income that pays a specific interest rate such as certificate accounts, Social Security benefits, pension benefits, some annuities or most bonds.  more

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 ...  more