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Blueprint Income has made it possible for anyone to have a pension — a steady source of income in retirement that continues for life. Below is our recent interview with Lauren Minches, VP of Product & Actuarial at Blueprint Income:
Q: Can you tell us more about you and the team behind Blueprint Income?
A: I’m Lauren, and I lead actuarial, product, and marketing efforts at Blueprint Income. I’m an actuary by training, which means I specialize in risk — good risks, bad risks, the financial implications of risk, mitigating risk, etc.
My prior work was very technical, specifically pricing mortality and longevity risks. I joined Blueprint Income to extend the impact of what we as actuaries do and help Americans better understand and protect themselves against financial risk.
I found in the Blueprint Income leadership — CEO Matt Carey and his two co-founders — people similarly frustrated by how difficult it had become post-employer pensions for people to protect themselves from financial risk in retirement. Our mission is to help Americans create retirements with more time for living and less time thinking about money.
Q: Could you provide our readers with a brief introduction to Blueprint Income?
A: Blueprint Income provides guaranteed retirement plans digitally through its online platform. Unlike market-based accounts like 401(k)s and IRAs, our plans are fully guaranteed for life thanks to our insurance providers. No risk of a market crash affecting your retirement lifestyle. No risk of outliving your savings.
Two-thirds of Americans are afraid of running out of money in retirement, which is a real concern faced by anyone without a traditional pension from their employer. Managing your spending in retirement when you don’t know how the stock market will do or how long you’ll live is a extremely complex. And, it’s exactly that which we’re making simpler with our flagship product, the Personal Pension.
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Q: Can you tell me more about the Personal Pension?
A: The Personal Pension is just like the old employer pension, except that the check you get in retirement comes from our insurance providers instead of from your employer. You can sign up for the Personal Pension years before or right at retirement. Either way, all money deposited into your Personal Pension buys low-cost income annuities. All plans are optimized to get the best possible annuity rates from across our 15 insurance providers. The funding is flexible — starting contributions are $5,000 with the option to contribute as little as $100 thereafter at whatever frequency you’d like.
Q: Why are you using annuities, and how are they different?
A: Annuities are what differentiates the Blueprint Income approach from any other retirement plan, and also makes it work just like a pension. With annuities, you transfer both the risk of poor market performance and the risk of living a long time (and thus life costing more) to an insurance company. Instead, you just get a steady paycheck every month in retirement no matter what.
Not all annuities are quite this simple. In fact, many of the annuities sold today are not fully-guaranteed and are more about growing assets than creating steady income. At Blueprint Income, we take on the responsibility of curating the annuities on our platform. We have 3 strict rules:
1. We only have annuities from insurance companies rated A or higher from A.M. Best.
2. We only have annuities that are fully guaranteed — no variable performance.
3. We only have annuities that provide a defined benefit knowable the day you put money in.
Q: How has Blueprint Income’s technology improved the annuity market?
A: We’re making getting guaranteed income through annuities easy and cheap, and eventually, making it possible to do it no matter where your money is. Annuities have been around for a long time, but buying them feels like buying a stock in 1970. You need an agent or a broker. It’s hard to see your options side-by-side. It’s hard to diversify. Everything is on paper.
So, we built an API that allows our users to get real-time personalized annuity quotes (for how much income you can get) in seconds from across all insurers in our competitive annuity marketplace. The comparison, plan building, sign up, and account management all happens online. Currently these capabilities are only available on our website, but we plan to start integrating with other money management platforms later this year.
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Q: Last question, who is the Personal Pension right for?
A: The Personal Pension (and income annuities in general) are for healthy pre-retirees and retirees who want to reduce their risk in retirement. That means they value a steady, guaranteed source of income in retirement and are willing to give up some potential market growth to get it.
One good litmus test is whether or not you have bonds in your retirement portfolio. If so, that means you want to diversify so that all your money isn’t at risk in the stock market. An annuity is like a bond that never ends — it has a similar risk profile, throws off income, and that income continues for life. Many would be better off replacing some or all of their bond allocation in the retirement portfolio with a Personal Pension.
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