“Income” is so much a part of investing nomenclature that it can be easy to miss important distinctions. Most mutual fund companies and almost every 401(k) plan offer some form of “income fund” or “growth and income” fund. But the return on investment from these investments fluctuate based market performance, trends in interest rates or the performance of the underlying securities (usually bonds).
There may be goals for income, and there are certainly benchmarks, but there is no guarantee of receiving returns. A fixed annuity, however, guarantees an income stream that a person cannot outlive. Only an insurance company can offer this form of guaranteed lifetime income.*
*All guarantees are subject to the claims-paying ability of the issuing insurance company.