Jan 21st, 2012 | By | Category: Senior Finances

Fixed Income Defined

Let’s take a look at what a fixed income is.  We typically use the term to describe the financial condition of millions of senior citizens.  When refer to income as ‘fixed’, we are saying that the income for those persons is limited to the monthly amount received from defined benefit plans, most likely Social Security. Those benefits may rise a little from year to year, but the amounts do not change within a year’s period of time. ‘Fixed’ means stagnant, unchanging… it is income that is ‘fixed’ in place for a specific period of time.

Contrast that with what many of us experienced during our productive career years.  We often sought and realized pay raises or additions to income that come with extra work, a second job, part-time work and extra effort. Our incomes fluctuated; they often changed from one month to the next, and sometimes with extra effort, our income increased.  If we were fortunate enough to have investments, we realized investment income through interest earned and dividends paid.

With fluctuating income, we could budget for extras when the extra income was there. Many of us were able to splurge on something out of the circle of ‘necessity’ from time to time. If we lived within our means, we were comfortable and secure financially.

Retirement Brings Financial Crises for Many Seniors

Retirement for many seniors brings a fixed income with no room for extras; that income is typically Social Security. Millions of us budget for basic necessities and have nothing left over for extras.  Indeed, many do not even have enough income for basic necessities, making it necessary to choose whether to buy groceries or pay rent, buy medicine or pay the electric bill, turn on the heat or pay the doctor. Living with unconscionable choices is the reality of life for many elderly people in America.

Our Social Security benefits are the lifeline for those of us on fixed incomes. And we number over half of the 55 million retirees in this country.  Our numbers are mighty, and our message to politicians is clear:  Don’t mess with our lifeline.  We can’t afford to lose it.




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