Jan 29th, 2012 | By | Category: Senior Finances

A recent discussion in a social situation brought some interesting considerations to light regarding senior citizen financesA group of seniors were talking about their needs for predictable guaranteed income, monthly sums they could depend on not influenced by the fluctuations of the stock market. Tens of thousands of senior citizens find themselves in this situation; few of us have such investments that provide for absolute freedom from worry about paying all the bills.

The discussion focused on what kinds of plans each person/couple had in place for ensuring monthly fixed income.  Here’s what they said:

Options for Monthly Fixed Income Benefits

  • They were all receiving Social Security benefits, and they depended on those funds for paying for basic and primary needs like food, shelter, medical bills, transportation and incidentals.
  • A couple of them had pensions from defined benefit plans with companies for who they worked pre-retirement; the monthly pension amounts were the same each month, and there was an annual increase based on something they couldn’t identify.
  • Several couples had purchased annuities, investing money in a plan that guarantees a certain monthly benefit for a prescribed period of time.  Amounts they received monthly varied a lot depending upon how much was invested originally.
  • Another woman had a 401-K plan from which she was receiving monthly payments.  She had contributed to the plan during her career; her investments remain intact, although changed from what they were when she was working.  She said her financial adviser recommended she have a more conservative investment strategy now because she doesn’t have ‘replaceable income’ any longer.
  • Several people had investments in insured bonds of all varieties, and receive sometimes monthly, sometimes quarterly, and sometimes bi-annually income from these investments.  Many of the bonds have a 20 or 30+ year life, so the income will be predictable for a long time to come.
  • One couple have been experiencing severe financial distress since the economy tanked, and they applied for and received a reverse mortgage on their home.  They chose to take the funds on a monthly basis for life, although they said they had the option to take the money in a lump sum and invest it with an investment firm.  As long as they are alive, they can remain in their home.

The discussion provided a good overview of the options available for seniors who need fixed, monthly, predictable income.  Some of our readers might want to talk with their financial advisers about the options.


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