Monthly Income Plan - MIP

AAA

DEFINITION of 'Monthly Income Plan - MIP'

A type of investment vehicle that provides a specified monthly payment to the investor. This monthly payment is intended to be a stable form of income and is therefore typically suited for retired persons or senior citizens without other substantial sources of monthly income.

INVESTOPEDIA EXPLAINS 'Monthly Income Plan - MIP'

A monthly income plan can be thought of as a budget for a retirement income. Rather than reaching retirement and spending your nest egg by making random withdrawals of varying amounts, a monthly income plan can ensure you receive a stable amount of funds each month to spend, which limits the risk of over-spending. In this regard, an MIP is similar in many ways to an annuity.

RELATED TERMS
  1. Annuity

    A financial product that pays out a fixed stream of payments ...
  2. Nest Egg

    A substantial sum of money that has been saved or invested for ...
  3. Pension Plan

    A type of retirement plan, usually tax exempt, wherein an employer ...
  4. Perpetuity

    A constant stream of identical cash flows with no end. The formula ...
  5. Longevity Risk

    The risk to which a pension fund or life insurance company could ...
  6. Mandatory Distribution

    The amount an individual must withdraw from certain types of ...
RELATED FAQS
  1. Is Social Security Income a perpetuity?

    Because Social Security income does not continue indefinitely, it cannot be classified as a perpetuity. What Is a Perpetuity? A ... Read Full Answer >>
  2. How does a provident fund compare to U.S. Social Security?

    A provident fund shares many attributes of the U.S. Social Security program, including government sponsorship and set contribution ... Read Full Answer >>
  3. How are benefits from a provident fund taxed?

    Not all provident fund benefits are treated equally, even in the same country. Thailand, for instance, has three separate ... Read Full Answer >>
  4. What does a sample plan using the 4% retirement rule look like?

    The 4% retirement rule is often used by financial planners to set the amount that a retiree can withdraw annually from an ... Read Full Answer >>
  5. How much can I contribute to my Roth 401(k)?

    The maximum amount that a person can contribute to his Roth 401(k) for the calendar year 2015 is $18,000, or $24,000 for ... Read Full Answer >>
  6. What is the difference between a 401(a) and a 401(k)?

    The difference between a 401(a) plan and a 401(k) plan is a 401(a) plan is any employer-only contribution plan such as a ... Read Full Answer >>
Related Articles
  1. Budgeting

    5 Ways To Stretch Your Retirement Budget

    Living comfortably can be easy if you follow a simple plan.
  2. Bonds & Fixed Income

    Explaining Types Of Fixed Annuities

    Learn about this popular retirement tool, its pros and cons and how annuities work to create a guaranteed regular stream of retirement income.
  3. Home & Auto

    An Overview Of Annuities

    These contracts provide a guaranteed income stream. Learn how they work and their benefits.
  4. Retirement

    Millennials: Retire With $1,000,000 --Here's How

    It is possible for Millennials to retire with $1,000,000, if they take the right steps and make the necessary sacrifices now.
  5. Professionals

    Pension Annuity vs. Lump Sum: Which is Best?

    Which pension distribution option best serves your client, a pension annuity or a lump-sum payout?
  6. Professionals

    How Retirees Should Approach Interest Rate Hikes

    Here's what retirees can do if interest rates rise.
  7. Investing Basics

    Are Annuities Right for You?

    Annuities are safe and often appealing, but IRAs and 401(k)s offer advantages that annuities typically can’t match, with little additional risk.
  8. Retirement

    Top Countries For Rich Retirees

    If your dream is to retire abroad and you've amassed a substantial nest egg, consider one of these luxurious options.
  9. Retirement

    Do You Owe Taxes On Your 401(k) When You Retire?

    The taxes you owe on your 401(k) at retirement depend on whether your funds are in a regular 401(k) or the Roth type. You may need tax help to work it out.
  10. Personal Finance

    Short On Retirement Savings? Retire Abroad

    Life in the U.S. can cost too much when your savings are low and your only income is Social Security. Time to look at retiring overseas.

You May Also Like

Hot Definitions
  1. Inbound Cash Flow

    Any currency that a company or individual receives through conducting a transaction with another party. Inbound cash flow ...
  2. Social Security

    A United States federal program of social insurance and benefits developed in 1935. The Social Security program's benefits ...
  3. American Dream

    The belief that anyone, regardless of where they were born or what class they were born into, can attain their own version ...
  4. Multicurrency Note Facility

    A credit facility that finances short- to medium-term Euro notes. Multicurrency note facilities are denominated in many currencies. ...
  5. National Currency

    The currency or legal tender issued by a nation's central bank or monetary authority. The national currency of a nation is ...
  6. Treasury Yield

    The return on investment, expressed as a percentage, on the debt obligations of the U.S. government. Treasuries are considered ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!