Flexible Private Pension

Published November 8, 2017
With the flexible private pension (the Personal Pension), you have full flexibility around your contributions. You could contribute annually, monthly, on an irregular schedule, or just once.
  • When we set out to create the flexible private pension (the Personal Pension), we knew flexibility was going to be important to our customers.
  • In this article, I describe what the flexible private pension does and does not afford you.

Let’s briefly review what the flexible private pension is and how it operates. The Personal Pension is a guaranteed paycheck in retirement, accomplished via subscription-based purchases of mini deferred income annuities. What’s that mean? Well, it means that every time you put money in, you get a guaranteed amount of income each month starting at some point in the future (that you choose and can later change). You start with an initial contribution of at least $5,000. That’s the ONLY contribution you’re required to make. But the idea is that, if you’re like most people, you’ll continue contributing little-by-little and see your future monthly income go up over time. Want more detail? Check out our longer explanation of the Personal Pension here.

OK, now onto how the Personal Pension provides guaranteed lifetime annuity income and what kinds of flexibility and inflexibility are inherent in the product.

Flexible Private Pension:  The Flexibility You Have

  • Flexibility to make future contributions. When you open a Personal Pension, your initial contribution buys you a predetermined amount of guaranteed monthly income. You may choose to continue contributing to grow your monthly retirement income. While it’s useful to make a plan for what those future contributions will be, any of them can be modified or canceled at least 2 weeks out.
  • Flexibility to adjust your Personal Pension based on what’s going on around you. Let’s say you have a plan about how you’ll buy yourself more income from the Personal Pension. And then let’s say your plans change (or maybe the market stops doing well). It’s easy to change your contribution schedule to the Personal Pension.
  • Flexibility to change insurers. We’ll start your Personal Pension with one of the insurers on our platform, chosen based on rates for your initial contribution and age. But, you’re not locked in to just that insurer, and we can help you redirect contributions to others over time.
  • Flexibility to change when the income starts. These provisions vary by insurance company, so just contact us if you’d like more details.

Flexible Private Pension:  The Flexibility You Don’t Have (and why)

  • The Personal Pension can’t be refunded. After the first 30 days, your Personal Pension purchase is permanent. That means you can’t elect to cancel your retirement paycheck and get a refund for the amount you put in. Why? Well, the basic answer is that offering this type of liquidity would make the guarantee more expensive to provide and the income you’d get from the product be lower.
  • You can’t choose how your Personal Pension gets invested. The insurer does it all for you. For most of our customers, they think of this as a blessing rather than a curse.
  • You can’t sign up for a Personal Pension within your active 401(k). We’re working hard to change that, but it’s not possible yet.

Questions on the flexible private pension? You know how to reach us.  Please also see this interview with our Blueprint Income’s CEO.

Matt Carey

Matt Carey

Financial Planning Professional

Matt Carey is the co-founder and CEO of Blueprint Income. He believes in the power of technology to make retirement simpler. Matt is a regular contributor to Forbes.com and has been quoted in both the New York Times and Morningstar.