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GOBankingRates’ editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services – our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines<\/a> and our products and services review methodology<\/a>.<\/p>\n 20 Years<\/strong> Trusted by<\/strong> Retirement means making a lot of choices. Sometimes, those choices are pure fun, like the first places you\u2019ll visit on your \u201cbucket list\u201d vacation<\/a> tour. Often, though, your choices are more consequential \u2014 like how you\u2019ll establish a stable income in retirement. While you may already have your 401(k)<\/a>, IRAs<\/a>, and investment accounts in place, you might also be considering additional sources of steady income, such as annuities, bonds and CDs.<\/p>\n Understanding the nuances of how each product works is essential to determining whether they\u2019re right for your financial goals \u2014 or how they might even work together. But comparing the ins and outs of annuities, bonds and CDs can be tricky \u2014 which is why GOBankingRates connected with Chris Berkel, an investment advisor and president of AXIS Financial<\/a>.\u00a0<\/p>\n<\/p>\n He helped explain how each product works and how they can come together like the parts of an orchestra to make beautiful music in retirement.\u00a0<\/p>\n You Can Use Them All Together\u00a0<\/p>\n Before describing the nuances of annuities<\/a>, bonds or CDs, Berkel emphasizes that purchasing one product doesn\u2019t mean you must forgo the others. In fact, you can combine them to build multiple revenue streams that serve your needs.\u00a0<\/p>\n \u201cWhen thinking about retirement income streams, it\u2019s more than any product; it\u2019s how we put them together to make the portfolio best meet the needs of the client we\u2019re serving,\u201d he said. \u201cLike any instrument in an orchestra \u2014 on its own, it can be very pretty and nice to listen to \u2014 but when you put everything together, the woodwinds, brass, percussion, strings \u2014 well, then you have something extremely special.\u201d<\/p>\n Understanding the Basic Differences\u00a0<\/p>\n If you think of annuities, bonds and CDs as financial instruments, they\u2019re ultimately working toward a symphony of stable income. Berkel said that each of them provides periodic payments, but they differ in how those payments are structured.\u00a0<\/p>\n Bonds can be split into two large categories: Treasuries and non-Treasuries. What\u2019s the difference between the two? Berkel described U.S. Treasuries as bonds that are guaranteed at maturity by the government, whereas no other bond is guaranteed \u2014 meaning you\u2019re relying on the company you lend to being able to pay back your principal at maturity.\u00a0<\/p>\n Berkel adds that CDs are unique as bank-issued products, which makes them similar to bonds. Since a CD is bank-issued, the FDIC guarantees the principal up to $250,000 per institution. He offers a hypothetical example of someone with a $500,000 CD at JPMorgan: \u201cOnly $250,000 of it is protected, and the rest is on the full faith that JPMorgan will pay you back.\u201d\u00a0<\/p>\n Know the Risks\u00a0<\/p>\n![\"\"](\"https:\/\/cdn.gobankingrates.com\/wp-content\/uploads\/2023\/11\/icon-20.svg?webp=1&quality=75\"){kind=icon}
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