If you are nearing retirement age and have a nest egg set off to the side, you may be thinking about living on a fixed income based on your savings. This fixed income retirement calculator will help you determine how long your retirement savings account will last you based on the size of payment you desire. If the numbers don’t quite work-out in your favor, that means you have to take a smaller payout or save more money by putting off retirement.
If you do desire a fixed-income stream for your retirement years, you may want to consider taking out a fixed income annuity.
Fixed-income annuities guarantee income
A fixed-income annuity product is basically a contract made with an insurance company that requires you to pony-up a lump-sum of money in return for guaranteed payments for a set amount for the rest of your life -OR- for a set period of time.
A fixed-income annuity is definitely a good part of a diversified income strategy for your retirement years. Fixed-income annuities are straightforward. Combining this type of annuity product along with social security payments and any pensions or other retirement plans you may have coming toward you can provide financial clarity and help you decide when to retire.
One thing to keep in-mind with a fixed-income annuity is that you will not have access to the principal once invested – you will have to keep receiving the monthly payments. Therefore you may need to have emergency funds set aside for any unforseen circumstances that arise. Thus, we don’t recommend putting every last drop of your available cash into a fixed-rate annuity, but rather keep a nice chunk in a liquid account (3-6 months worth of expenses).