What Is a Fixed Benefit Payment?

A “fixed benefit payment” means that the payment amount you receive in retirement will remain the same over your lifetime.

Fixed benefit payments do not increase with inflation, which is a very important factor in retirement planning.

TCDRS and other public pensions often provide their retirees with fixed benefit payments for life.

Social Security payment amounts regularly increase to keep up with inflation. In contrast, fixed benefit payments remain the same.

The upside of a fixed benefit payment is reliability. You’ll have a steady, predictable income stream for the rest of your life.

The downside is that a fixed benefit payment will purchase less and less as the cost of living continues to increase. Even if your lifestyle doesn’t change, inflation causes the price of groceries, health care and other goods and services to go up a little bit each year.

Use this inflation calculator to see how the buying power of the U.S. dollar has decreased over time.

The further you are from retirement, the more options you have. Extra savings and investments can help increase your retirement income to soften the impact of inflation.

If retirement is on your near horizon, creating a budget can help you see where your expense and income numbers don’t add up, according to The Balance. It gives you the opportunity to make changes now that will let you do what’s most important to you in retirement.


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