Create Your Own Pension
Pension Strategy · Illustration

Same $40,000 a Year. Very Different Retirements.

Hope and Helen are twins with the same $40,000 income gap to close at 65. One leaves it to the market. The other closes it for good. Pick a real stretch of history and watch what actually happened, using real S&P 500 returns, not projections.

Hope
Hope
Draws income from her portfolio
Retires at age 65 with a $1,000,000 portfolio
Withdraws $40,000 a year directly from that portfolio
Her income is at risk every single year
Her balance rides the market up and down every year
Helen
Helen
Draws income from a Pension Strategy
Retires at age 65 with $466,828 still invested, plus a Pension Strategy paying her income
Set up her Pension Strategy years earlier to pay her $40,000 a year, guaranteed
Her income is guaranteed, never at risk
Her portfolio is never touched to generate that income

25 Years Later

Hope's portfolio (funding her own withdrawals)
Helen's portfolio (untouched, income paid separately)
Hope's Portfolio, Age 89
$0
After 25 years of self-funded withdrawals
Helen's Portfolio, Age 89
$0
Never withdrawn from, grew untouched
Both took home $1,000,000 in income over 25 years. $0 more in Helen's portfolio at 89, on top of income that never wavered
What this doesn't show: these numbers are flat, they don't adjust for inflation, and they don't account for portfolio management fees. Inflation erodes the buying power of both sisters' income the same way, and management fees would reduce returns on whatever stays invested in the market, Hope's full balance and Helen's remaining portfolio alike. This illustration also doesn't include any ongoing rider fees on Helen's Pension Strategy allocation, or the liquidity restrictions on that money while it's committed to the strategy, both are part of the conversation worth having on a call.
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Year-by-year detail using actual S&P 500 total returns. Hope's withdrawal is subtracted first, then that year's return is applied to what remains. Helen's portfolio simply grows, untouched, at the same market returns.

Age Calendar Year S&P 500 Return Hope's Portfolio Helen's Portfolio

Which Sister Are You?

Whether Hope's strategy works out depends on which 25 years she gets. Some stretches, it works out fine. Others, like 1929, it doesn't. Either way, her income rides the market the entire time. Helen's income never depended on the market, in any of these stretches, and her portfolio kept growing right alongside it. The good news is you don't have to choose between growth and guaranteed income. You can have both.

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