Retirement income
Guaranteed income floor
A guaranteed income floor is the portion of your essential spending covered by income that does not depend on market performance, typically Social Security, a pension, or an annuity.
Also called income floor · essential income
The idea is to separate the expenses that must be paid regardless from the ones that could flex. Once the must-pay layer is covered by income that arrives whatever markets do, a bad year becomes an inconvenience to discretionary spending rather than a threat to the household.
It also changes behavior, which is where much of the value sits. Investors with a floor are considerably less likely to sell at the bottom, because they are not being asked to fund groceries from a falling portfolio.
What it does not do
Building a floor does not mean insuring your whole retirement, and over-building it costs growth you will need later for inflation. It also does not eliminate sequence risk for the discretionary layer. It contains it.
This entry is a general explanation, not advice for your situation, and it deliberately avoids thresholds and figures, because those are the part most likely to be out of date. Reviewed August 27, 2026. If a decision turns on any of it, ring the office rather than relying on a page.
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These interact with it.
From definition to your situation
Whether this applies to you is a different question.
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