Monthly Retirement Paycheck for Life

Published September 13, 2017
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.
  • Deposits into your Personal Pension are turned into a monthly retirement paycheck guaranteed by one of the insurers on our platform
  • With a Personal Pension, you’ve transferred the market and longevity risks of your retirement onto insurers, and you can sit back and relax
  • Starting a Personal Pension requires $5,000 which can come from an old 401(k), an IRA, or any savings account. After that, you can contribute more whenever you want to increase your retirement paycheck further, but it’s not required

The Personal Pension is a monthly annuity retirement paycheck that continues as long as you’re alive and isn’t subject to market risk. It’s backed by one or more insurance companies and can be purchased with as little as $100 at a time, after opening your policy with an initial deposit of $5,000.

We work with insurance companies who guarantee a steady, monthly retirement paycheck starting at a certain age (usually done to coincide with retirement). Today, those insurers include Guardian and Lincoln Financial.

Deposits into your Personal Pension are used to purchase mini income annuities at one of the insurers on our platform. At that point, you’ve transferred the market and longevity risks of your retirement onto the insurers, and you can sit back and relax. The insurance companies that guarantee the Personal Pension make a promise to provide you with a predetermined monthly retirement paycheck that won’t change based on how long you live or whether or not a market crash occurs.

The Personal Pension can be purchased over time and the amount of monthly income each contribution will generate is guaranteed at the time each purchase is made.

The monthly income or size of the monthly retirement paycheck you get from each contribution depends on:

  • How much you put in: LARGER CONTRIBUTIONS result in MORE income
  • How soon you put money in: SOONER CONTRIBUTIONS result in MORE income
  • When the income starts: LATER INCOME START DATES result in MORE income
  • The annuity rates: HIGHER ANNUITY RATES result in MORE income
  • The credit rating of the insurer: LOWER CREDIT RATED INSURERS usually provide MORE income
  • Your gender: women are expected to live longer than men, so they get lower rates

For example, let’s consider a 30-year-old male signing up for a Personal Pension that will start on his 70th birthday. The following table shows how much income he can expect to get for every dollar he puts in between now and then. To explain the first row of the table, at age 30, a $1,000 contribution would get him $291 per year starting at age 70.

Because the Personal Pension provides income for life, it’s impossible to calculate the return he’ll make ahead of time. But, if we assume he lives until 80, his IRR will be 2.6%. The longer he lives, the more income he’ll receive, and the greater his return will be. If he lives until age 100, his IRR will be 4.2%.

The rest of the table provides an estimate of future rates, but those are likely to change once he reaches those ages. Assuming no change in rates, though, the earlier you contribute, the more income you’ll get.

Personal Pension Rates

Current Age Annual Income per $ Contributed IRR @ Age 80 IRR @ Age 90 IRR @ Age 100
30 29.1% 2.6% 3.7% 4.2%
35 24.9% 2.6% 3.8% 4.3%
40 21.3% 2.5% 3.9% 4.5%
45 18.2% 2.3% 4.0% 4.6%
50 15.4% 2.1% 4.1% 4.8%
55 12.8% 1.7% 4.2% 5.0%
60 10.7% 1.1% 4.3% 5.4%
65 8.7% -0.5% 4.3% 5.7%

Rates as of 11/20/2017 for a male with income starting at age 70 and without the Refund At Death option.

With the Personal Pension, we’ve improved on the annuity model. You get the same insurance-backed guarantee of lifetime income or a monthly retirement paycheck for your lifetime along with the ability to get started younger, in smaller amounts and diversify over time.

Attached is an article for your reference.  Questions? You know how to reach us and we’d love to chat!

How Can I Start a Personal Pension?

A Personal Pension is a contract between you and top rated insurance companies. By making contributions to your Personal Pension over time, you develop a portfolio of guaranteed annuity income available in retirement. Blueprint Income offers a Personal Pension account with the lowest minimum, $5,000. After opening an account, you can make subsequent contributions of as little as $100, each of which will increase your pension check.

Here you can see what contributing to a Personal Pension will guarantee you in retirement income. After just a few years in retirement, you’ll have recouped your initial investment, and the rest will be profit.

You can continue with the enrollment process on your own or fill out the information to have one of our specialists follow up with you by starting with the Personal Pension Builder, where you’ll be able to set a goal for how to grow your pension over time. Note that all future contributions are optional, but it’s always great to have a goal.

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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.