
The Personal Pension
Monthly Retirement Paycheck for Life
The Personal Pension is a monthly retirement paycheck guaranteed by insurance companies. Every dollar you put in buys you steady monthly retirement income that you can't outlive.
The Personal Pension is a powerful way to protect your retirement savings from the risks of the market and the risk of outliving your money. The Personal Pension turns some of the money you’ve saved for retirement into a guaranteed annuity paycheck of a set amount that continues for as long as you’re alive. The paycheck is guaranteed by a highly-rated insurance company (or companies), and the amount you get each month in retirement is locked in as soon as contributions are made.
The end result looks just like an annuity, but unlike an annuity you can get started with a small amount and contribute little-by-little each month. You don’t have the obligation to add to the Personal Pension; just the option!
There are a few different ways to approach the decision of protecting your retirement savings. Below I’ve laid out three of the most common approaches, Just Get Started, Income Gap, and Asset Allocation.
You know you’ll retire and you know you don’t want to have all of your money in the market or be worrying about running out of money later in life. You know that Social Security alone won’t be enough. And you know you can’t reasonably expect a pension from your employer. So you start small and resolve to contribute a small percentage of your total savings to the Personal Pension.
Potential Next Step: Do the diagnostic here. And remember, it only takes $100 to get started.
Take a look at your expected spending in retirement. That might be hard to do if you’re far away from retirement, but here are a couple steps.
Potential Next Step: Contact us and we’ll help you come up with your own Retirement Spending Plan.
The general rule of thumb used to be that your allocation to fixed income should be the same as your age. For example, if you’re 40, then you should be 60% equities/40% fixed income. Recently, and largely due to longer life expectancies, some now believe allocation to fixed income should be slightly lower for a given age. Either way, it’s a general rule of thumb. People will argue about the specifics, but the rule of thumb reflects the widely accepted belief that the risk in your retirement portfolio should go down the closer you get to retirement.
If you’re taking the Asset Allocation approach to retirement planning, think about the Personal Pension as part of the Fixed Income portfolio. The Personal Pension is more powerful than a traditional bond though because it provides a monthly income (like a traditional pension) that continues no matter how you live. Live to 122 like Jeanne Calment and the monthly checks keep coming! It’s also an income stream that isn’t correlated to market movements. For all the money you’ve already put in, the income you’ll get is set. The product, however, is illiquid, meaning you can’t access the money you put in, even in the case of an emergency.
Potential Next Step: Your situation likely warrants additional consideration beyond what a general rule of thumb can provide. Contact us and one of our actuaries or CFAs can provide you with additional insight on your specific situation.
Neither stocks or bonds protect your retirement savings against market volatility or the risk of outliving your money. If you’re like most people and concerned about these risks, don’t have a pension and are willing to forgo liquidity with a small portion of your portfolio to protect against them, then click below to see what a Personal Pension could look like for you. After just a few years in retirement, you’ll have recouped your initial investment, and the rest will be profit. A $100 contribution is necessary to start an account.
From there, you’ll get access to our team of specialists to help you analyze your retirement finances and walk you through the application process.
Interested in learning more about retirement and the annuity market? Sign up here to be on our newsletter.
The Personal Pension is a monthly retirement paycheck guaranteed by insurance companies. Every dollar you put in buys you steady monthly retirement income that you can't outlive.
Private pensions (like the Personal Pension) can meet your retirement needs if you want steady, guaranteed income that's isolated from the market and continues for as long as you're alive.
If you don't have an employer pension plan, you can use a private pension (Personal Pension) to create one for yourself. Every dollar you put in buys you insurer-guaranteed income.