Frequently Asked Questions
What are the different types of guaranteed income?
Guaranteed income is a financial strategy that ensures a steady flow of income, typically after retirement. There are several types of guaranteed income, each with its unique features and benefits. One type of guaranteed income product is an annuity. An annuity is an investment that, once made, guarantees a steady income stream for the rest of the investor's life. Annuities can be either fixed-rate or variable-rate. Fixed-rate annuities guarantee a consistent level of income for the term of the annuity, while variable-rate annuities' income levels may fluctuate based on the performance of an investment portfolio. Another type of guaranteed income product is a Guaranteed Investment Contract (GIC). In a GIC, investments can be made using a salary reduction plan, such as a 403(b) or 401(k), if the employer offers this investment option. The insurance company offering the GIC takes a risk with the goal of earning more on the investment than the rate guaranteed on the GIC.
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