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Topic Personal Pension: Basics

Personal Pension: Basics

What is the Personal Pension?

The Personal Pension is a monthly retirement paycheck that offers you a guaranteed and consistent stream of income during your retirement years that lasts as long as you do. It’s the next best thing after an employer pension.

Personal Pension: Basics

How is the Personal Pension different than an annuity?

Both the Personal Pension and a traditional income annuity guarantee lifetime retirement income, but there are some key differences between the two.

  1. The Personal Pension is subscription based and accepts small, recurring contributions instead of a large one-time deposit
  2. The average Personal Pension account is opened with $5,000, as compared to a traditional annuity’s average one-time premium of $100,000
  3. Not only are these contributions smaller in size, but you have the flexibility to change how frequently you want to make them
  4. Rather than choosing just one insurance company, the Personal Pension allows you to diversify across different insurance companies based on credit rating and pricing
  5. Because you can contribute over time with the Personal Pension, you also have the ability to benefit from future increases in annuity rates

Personal Pension: Basics

How does the Personal Pension last a lifetime?

Similar to a traditional income annuity, the Personal Pension is a contract between you and an insurance company where the money they promise to pay you is not only guaranteed, but is given to you for the rest of your life. Unlike any market investment, annuities provide longevity protection so you don’t outlive your savings.

Personal Pension: Basics

How much does the Personal Pension cost?

The Personal Pension requires a $5,000 starting contribution. That $5,000 turns into a future guaranteed retirement paycheck at a rate based on your gender, age, and when you want your pension to start. You can continue to contribute voluntarily, with as little as $100 a month. You can change your contribution size and schedule whenever you want.

Personal Pension: Basics

Is there a cash value for the Personal Pension?

The Personal Pension does not have any cash value, which means you can’t surrender or withdraw from it. It is made up of income annuities that, unlike investment annuities, offer only a guaranteed lifelong retirement income. Because you can’t surrender or withdraw your money, insurance companies are able to offer better rates.

Personal Pension: Basics

How is the Personal Pension guaranteed?

Your Personal Pension is guaranteed by our insurance partners —  the highest-rated, oldest, and most reliable in the business. They guarantee that for every dollar you contribute, you will receive a monthly retirement paycheck for life.