What Are The Best Fixed Income Investments For Retirement?

Shawn Plummer

CEO, The Annuity Expert

Retirement is the time to enjoy the fruits of your labor and relax without worrying about the daily grind of work. However, for most people, retirement planning can be overwhelming, and one of the most significant concerns is securing a stable income stream to meet their needs. Fixed-income investments can be a great way to provide reliable returns for retirees, and in this guide, we will explore the best fixed-income investments for retirement. We will also discuss the factors that influence fixed-income investments and provide insights into choosing the best investment options for your retirement portfolio.

Understanding Fixed Income Investments

Fixed-income investments are a type of investment that provides investors with a fixed income stream over a set period. These investments include bonds, certificates of deposit (CDs), and other fixed-interest investments. Fixed-income investments are generally considered less risky than equity investments because they provide a predictable income stream and have a lower chance of loss.


Bonds are fixed-income investments where investors lend money to a corporation or government entity in exchange for regular interest payments and the return of the principal at the bond’s maturity date. Bonds are considered a safe investment because stable entities typically issue them with good credit ratings. They also provide a predictable income stream, making them a popular choice for retirees.

Certificates of Deposit (CDs)

Certificates of Deposit (CDs) are another type of fixed-income investment where investors lend money to a bank for a set period in exchange for a fixed interest rate. CDs are considered a safe investment because they are insured by the FDIC up to $250,000 per depositor, per institution. CDs are an excellent option for retirees because they offer a fixed return, guaranteeing the principal.


Annuities are fixed-income investments that can provide retirees with a reliable income stream for their entire retirement period. Annuities are issued by insurance companies and come in various forms, including fixed annuities, variable annuities, and indexed annuities.

What Are The Best Fixed Income Investments For Retirement?

Factors that Affect Fixed Income Investments

Several factors affect fixed-income investments, and understanding them can help retirees make informed investment decisions.

Interest Rates

Interest rates play a significant role in fixed-income investments, and changes in interest rates can impact the returns of these investments. For example, when interest rates rise, the value of existing fixed-income investments decreases, and vice versa. Therefore, retirees should consider the current interest rate environment when choosing fixed-income investments.

Credit Risk

Credit risk is another important factor that affects fixed-income investments. Credit risk refers to the risk that the borrower will not be able to repay the loan, which can result in a loss for the investor. Therefore, retirees should consider the credit rating of the entity issuing the fixed-income investment and their ability to meet their debt obligations.

Choosing the Best Fixed Income Investments for Retirement

Choosing the best fixed-income investments for retirement can be challenging, but understanding your investment goals and risk tolerance can help you make informed decisions.

Investment Goals

Retirees should consider their investment goals when choosing fixed-income investments. For example, if they need income to cover their living expenses, they may choose investments with a higher yield, such as high-yield bonds. On the other hand, if they are looking for a safe investment option, they may choose investments with a lower yield, such as CDs.

Risk Tolerance

Retirees should also consider their risk tolerance when choosing fixed-income investments. If they have a low tolerance for risk, they may choose investments with lower credit risk, such as government bonds. However, if they are willing to take on more risk, they may choose investments with a higher yield, such as corporate bonds.

Next Steps

Fixed-income investments are an excellent option for retirees looking to secure a stable income stream during their retirement years. Bonds and CDs are two popular options for fixed-income investments. However, understanding the factors that affect these investments and knowing how to choose the best investment options based on your investment goals and risk tolerance is crucial to building a successful retirement portfolio. Retirees should also remember that fixed-income investments should be part of a well-diversified portfolio, which includes a mix of stocks, bonds, and other assets.

The Best Fixed Income Investments For Retirement

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Shawn Plummer

CEO, The Annuity Expert

I’m a licensed financial professional focusing on annuities and insurance for more than a decade. My former role was training financial advisors, including for a Fortune Global 500 insurance company. I’ve been featured in Time Magazine, Yahoo! Finance, MSN, SmartAsset, Entrepreneur, Bloomberg, The Simple Dollar, U.S. News and World Report, and Women’s Health Magazine.

The Annuity Expert is an online insurance agency servicing consumers across the United States. My goal is to help you take the guesswork out of retirement planning or find the best insurance coverage at the cheapest rates for you. 

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