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If you have not done so already, please review the page: What is a Personal Pension?
The fixed annuities that make up a Personal Pension are are custodied, managed, and guaranteed by large, well-established insurers with top financial ratings. Harbor hopes to remain your software partner of choice for monitoring, contextualizing, and adding to your holdings, but it's at your option to work with us. Even if you stop working with Harbor's software, your assets will be safe with the highly rated insurer backing the annuity contracts underlying your Personal Pension.
Individuals can build a Personal Pension of fixed annuities inside a tax-deferred account (IRA or 401k), and can fund it like they would any other account: with a rollover or a new contribution.
Harbor is a software company providing digital tools to educate on and plan for guaranteed lifetime income in retirement. We enhance the retirement income discussion between financial professionals and their clients.
A well-balanced portfolio is important for any retirement. A Personal Pension provides peace of mind and a guarantee that your retirement income will never fall below a certain level. We suggest that ~20% of your assets be saved in a Personal Pension as the cornerstone of the low-risk portion of your portfolio. Other investments like equities, real estate, and bonds can be used to make up the balance of your portfolio. You should consult a financial advisor to discuss your specific situation.
You may lose your contributions. Bear in mind this is extremely unlikely. Insurance companies are heavily regulated by state and federal agencies, who monitor and review insurers’ financial health and ability to meet obligations under a variety of market conditions.
Finally, the types of insruance contracts likely to underlie your Personal Pension have never defaulted in history, including during the 2008 recession. In the unlikely event an insurer does go bankrupt, policyholders are given first priority to be paid back - ahead of shareholders and executives.
The insurance company charges fees to manage the assets and provide a lifetime income guarantee. Your financial advisor also receives a one-time commission in selling you a contract, typically in the 4% range.
Whatever the fees are, they are already included in the projected performance of the contract. Where you receive a quote of lifetime income, you are quoted the amount you will receive, net of fees.
Depending on the final contract decided on by you and your advisor, there can be different rules governing the your ability to withdraw your funds and any accumulate balance, should there be one.
Your should discuss with a financial professional during the setup process.
Being "qualified" means the contract is funded using pre-tax retirement savings. Typically you fund it by rolling over savings you already hold in a 401(k), IRA, or similar retirement plan. It can also be funded with a $5,500 annual IRA contribution, if the individual is eligible and has not already made that contribution to another account in 2017.
Non-qualified annuities are funded from an after tax source, which is basically everything other than retirement savings: savings accounts, sale of a house, sale of stocks/bonds.