Personalized Pension Plan: life-choices, mandates

Twenty years I’ve advised, and ten years I’ve offered public and virtual seminars on getting the most Life from the value in your Pension Plan.  What are your Choices?  How do you optimize Value for the Life you want?  Would you dare ponder how to personalize a pension that seems to promise (maybe) a fixed-income for life?   Consider if you’re a professor, an executive, a business-owner …and one of your largest assets is a pension.  Will you “commute” this into a Personalized Pension Plan?  What can you gain or lose in doing so?  Could you lose 50%?  Could you lose 100%?  What are the key risks, and the critical pieces you need to know?   (PS: slide-deck or 1-page summary available on request, also chapters 1 and 5 of my book, A Lifetime Of Wealth – And How Not To Lose It.  Today’s article touches key highlights – and cautions – that raise many personal and group discussions.)

You can choose.

First let's explain, traditional pension plans are designed so at some age you’ll retire with an income that pays as long as you live.  It can rise or fall (see below).  It may pay to a surviving spouse at your death (or not).  Many plans let you “commute” the pension at or before retirement.  This would mean taking the value of your pension to manage it personally or with professional guidance.

How to live with NO Guarantees?

Monopoly Man_No Money picMany pensions are underfunded;  these carry a promise but too little money to support your future.  This puts pension trustees in a terribly hot seat for reasons I’ve outlined elsewhere.  Point is, pension plans are an estimate but not a guarantee.  Pensions have been cut back 25%, even 50% (knocking retirees who seriously depended on that income).  Pensions seldom cushion the future with extra savings, yet global meltdowns can steal 20-to-50% from pension funds.  Pension Trustees’ fears also include the fact pensioners are living and drawing money for 20, 30, 40 years after retiring – still expecting a steady and safe income.

                  An overwhelming majority believe the future of pension plans is at risk.
           This dark cloud on the horizon is an incessant worry, public and private plans
      will have to reduce payments in the future in order to remain solvent.  (

What kind of Lifestyle?

Pension income can be forecast as a flat-line allowance intended to continue while living, plus a smaller percentage for a surviving spouse.  If you foresee living on a limited income by reading books, tending gardens, carefully budgeting your travels and activities, then this fixed income may suffice.  A fixed-income may be more-or-less suitable if it will reflect the lifestyle you choose.   But what if you want to break out of the flat-line, to personalize income and lifestyle in early retirement, and manage rising needs in your later years?

Greek coastline PICLifestyle is everythingto live as you choose should be your sovereign right!  Picture yourself on an extended river cruise in Europe followed by an unlimited road-tour along the Mediterranean coastline.  What cities, what sites, what sounds and music, what foods to delight your palate do you want to enjoy along the way?  Will you be packing crackers and tinned tuna to cut costs, or will you be able to fully enjoy all that such experiences can offer you?   If such a season would add $20,000 or $50,000 to your expenses ….would it be the last time you ever take that trip?  Or can this lead to adventures on other continents in the “opening horizon” of 5, 10, 15 years in early retirement?  (See “Life Horizons Analysis”)

Personalized Pension Plan – preserving income for life!

Here’s the problem.  It’s two-fold.  Experience proves that fixed-income pensions cap or limit your lifestyle choices.  Experience also proves that people can make sad choices with their money, so investments have fallen repeatedly and disastrously.  Staying in a pension plan you want confidence that trustees are managing effectively to sustain income over the next 40-75 years.  When taking your money out of the pension plan (ie. commuting to a personalized pension plan) you absolutely must know that your investment platform will reduce risks and sustain income for life!  You never, never, never commute a pension plan until successfully aligning this wealth with clear and prudent “life income mandates” (see LIM) to support living to age 90 and beyond!

As I’ve published over several years (website book) Life Income Mandates offer precise and clear strategies to successfully personalize your pension.  Page 95 in my book reveals a picture of what happened in 2008-2009 which was the worst global meltdown since 1820 and 1929.  When world investment markets tumbled 55% to 75% and took 6 years to recover, an approach based in life income mandates could drop 8-15% at that time and recover within 12-18 months …offering vigorous and continued growth while the world clawed its way out of the abyss.

The worth of such mandates was focused by a business owner (and it would be the same issue if you're commuting a pension plan) who asked me, “So I could sell my business which is paying me a great income, but investing into 3% deposits means I’ll run out of money in 8-10 years, or investing in the stock market means total uncertainty of surviving 5 years or 35 years.  Why would I take those kinds of chances!”  Life income mandates is the clear answer, and describes why investors – even a few pension plans – can have results so vigorously outpacing what others have experienced.

Personalized Pension Plans (if we’re investing your pension money) must follow clear mandates to preserve and perpetuate your income.  In our website here you can refer to a wide array of commentary on applying these life income mandates …and specific pieces highlighting dividend income, global infrastructure (view) and real estate income, cautious strategies to succeed in fixed-income despite low interest rates, and even life annuity guarantees (view).  Our focus now becomes designing a precise and comfortable fit for you today and through all life’s horizons … even ultimately for your family Estate.

Estate value for your Spouse, children & grand-children.

In many families wealth lasts but one generation and is gone.  Many families who used to have wealth now realize it lasted only two or three generations.  Part of my service and focus is to ensure wealth can sustain for the future and even beyond your expectations.

In a pension plan you thought the Income was for you and your spouse – with children ultimately receiving zero!  Single – no spouse – the pension would terminate at your death!  But what if we arrange that your children and grandchildren (or friends, or even your charities) can receive the residual value of your pension?  Instead of your death allowing pension trustees to replenish an under-funded pension plan for strangers you’ll never meet, would you rather create a lasting gift for your family or community?  … So imagine if Adam’s pension provides a luxury lifestyle, and his death sustains 100% income to Eve, with family gifts or trusts to continue after Eve eventually passes.  Why not?  This is fully possible with your personalized pension plan.

An aside here if selling a business:  you can design the proceeds of sale on similar lines except you’ll pay less tax.  Life income mandates with estate insurance (view) if you wish can sustain a level of luxury plus dynastic trusts to fulfill your lifestyle and ultimate estate planning.

Some questions.

What if we’re younger, or you're thinking of colleagues or children who are younger?   Our discussion here is worth sharing with people changing employers (moving or commuting pension) or in how you would invest inside a defined-contribution pension plan – also to diversify investments outside your business, or in a holding company.

What if we’re the spouse …if a partner is the one with pension, business, or other substantial asset?   Under pension legislation your spouse may be obligated to confirm pension decisions with you.  In sale of a business, “ownership structure” can drop taxes to half or less, so working with advisors can be worth every penny.  Being a spouse, focus these days to learn all you can and so help optimize value for yourself and your family.

Health insurance.  Will health and dental coverage be important for your financial future?  Would leaving a pension or selling a business mean having to locate alternate health coverage through spousal, retail, or association plans?  Have you looked at how to cope with health inflation near 10% …and future expenses when physical or mental health can necessitate in-home or long term care?

Reach me with any such questions or related matters.

Handshake _earth & waterYour Personalized Pension Plan.

What is Life if you’re lacking the financial capacity to enjoy it fully as you choose?  Some people can be suited to a traditional pension plan providing a fixed monthly allowance for life.  Some too have left a pension’s safeguards and yet forsaken the principles that preserve wealth and life-income.

Now for YOU -- your future, your home and family -- if you want freedom for a flexible income and a sovereign be-your-own-master lifestyle, then you must anchor your security in mandates proven to safeguard your life and loved ones when personal events or world circumstances tumble.  Two key pieces I’ve shared here with you include:  (i) locking-in on your desired lifestyle, comforts, and personal goals;  and (ii) aligning wealth and income to support such lifestyle and goals.  Indeed all of the educational pieces of this website expand on these two vital themes.

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Ret.Coach SEALBrian Weatherdon, MA CFP CLU CPCA MDRT
905-637-3500 x 223  . 
Certified Financial Planner.  Certified Retirement Coach.



  1. I hope your pension plan isn’t among the ones with only 50% to 80% funding. Such dangerous underfunding should be illegal, but it’s not. Have a peak at and find the 4 worst assumptions pension trustees and legislators have allowed …to permit inaction.

    Now consider a pension plan in which you – or someone close to you – may be a member. What level of funding is in place? What happens if you retire, and along the way your pension is forced to cut your income by 30% or 50%? … How can your financial plan cope with such events and still provide the lifestyle you want to enjoy?

    Our discussions in this website offer resources to support your financial freedom and lifelong wellbeing.

  2. Here’s an idea as written-up in the Globe and Mail last Saturday:

    First, reduce to 85% the funding requirements from which pensions manage future liabilities.

    Second, allow at least five years (or more if needed?) for pensions to remedy their shortfall.

    Third, increase Ontario Pension Benefit Guarantee from $1000 to $1500 (anyone over that, “good luck!”).

    Fourth …oh shoot there is no #4, but with average private sector pensions at $1300/m there could be cat food.

    Fifth (missing from the article): taking charge & personalizing one’s pension to assure Income for Life.

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