As you save for retirement, it is essential to diversify the types of investments you select, your investments themselves, and the riskiness of your investments. One way to diversify is to have both fixed and variable investments. Fixed investments provide a specified rate of return, while variable investments have a return that can vary significantly from year to year. Fixed investments usually have a lower rate of return because they are less risky. Consider adding these three fixed-income investment products to your retirement portfolio.

1. Fixed Annuity

A fixed annuity provides a specified rate of return and consistent payments. Once you purchase a fixed annuity, you receive payments for the duration of the annuity.

You can receive these payments immediately (immediate annuity) or you can defer the payments until you are ready to retire (deferred annuity). If you opt for a deferred annuity, your money grows at a specified rate until it is time to receive the annuity payments.

2. Certificate of Deposit

A certificate of deposit, also referred to as a CD, is a type of savings product with a fixed duration. This means that the CD does not mature until a specified date. The possible CD terms vary significantly, from a few days to a few years. You receive the same interest rate for the length of the CD. The frequency that the interest compounds at varies based on your specific CD.

You can purchase CDs inside or outside of your retirement accounts. If your purchase the CD inside of a retirement account, such as your IRA, your money can grow tax free until retirement. The downside to purchasing CDs inside of a retirement account is that if you access the money before retirement, you have to pay a penalty.

3. Bonds

Though bonds are a fixed income product, they are not without risk. Even though the rate you receive does not vary, there is always a possibility that the country, entity, or company may fail.

When you buy a bond, you loan your money for the duration of the bond. The entity must make regularly scheduled interest payments for the duration of the bond. Once the bond matures, you get your money back.

To decrease the risk associated with buying bonds, consider treasury bonds or municipal bonds (bonds issued by local government entities). Though the return is lower on these bonds, they are regarded as being some of the safest types available.

You can also buy corporate bonds. To minimize risk, stick with large, well-known companies. If you are chasing a higher return, consider smaller, less stable companies.

As you plan for retirement, maximize your chances of having a sufficient nest egg by utilizing several type of investments. Include fixed income investments to add low risk growth to your portfolio.