How to create your own pension

Once upon a time, in a magical land called “The Past,” people worked at a company for 30 years, got a gold watch, and then strolled off into the sunset with a guaranteed pension check for life. Ah, the good old days—when retirement security wasn’t a DIY project and you didn’t need a Ph.D. in investment strategy just to survive your golden years.

But guess what? Pensions are going the way of VHS tapes and fax machines. If you’re under 50, you’ve probably never even seen one in the wild. Companies used to love handing out pensions—until they realized they were promising lifetime income to people who kept stubbornly living longer. Turns out, paying retirees for 30 or 40 years after they stopped working wasn’t exactly great for corporate profits. So, they pulled the plug.

Why Did Pensions Get Ghosted?

Employers had a few reasons for breaking up with pensions:

• They’re Expensive – A guaranteed lifetime paycheck for thousands of retirees? Yikes. Companies started looking at the bill and decided they’d rather not.
• Regulations Got Messy – Government rules made pensions trickier to manage, so businesses took the easy way out—offloading responsibility onto employees (that’s you!).
• People Stopped Staying at One Job Forever – Back in the day, folks stuck with the same company for decades. Now, job-hopping is practically a sport. Employers didn’t see the point in offering a pension when most workers wouldn’t stick around long enough to collect.

Enter the 401(k)—Your New Best Frenemy

Instead of pensions, most companies now hand you a 401(k) and say, “Good luck!” That’s right—your retirement security is now your responsibility.

Unlike pensions, where your employer handled all the heavy lifting, a 401(k) requires you to contribute your own money, pick your own investments, and hope the stock market doesn’t go full rollercoaster mode right before you retire.

And sure, 401(k)s can grow your money over time, but they come with a few problems:

• Market Risk – If there’s a recession right when you retire, well… hope you like ramen noodles.
• No Guarantees – A pension paid you no matter what. A 401(k) is more like, “Maybe you’ll be fine? Maybe you won’t? Fingers crossed!”
• DIY Stress – Now, instead of just collecting a check, you’ve got to become your own financial planner, investment manager, and retirement strategist. No pressure!

So, What Can You Do?

If you’re not lucky enough to have a pension, don’t panic (okay, maybe panic a little, but productively). There are ways to create a reliable retirement income, and it doesn’t involve winning the lottery:

1. Consider Annuities – Think of annuities as a “make-your-own pension” kit. You invest money now, and later it pays you a steady check for life—just like a pension used to.
2. Diversify Your Income – Social Security, personal savings, part-time work, or even rental income can all help create multiple streams of money in retirement.
3. Get a Plan – Retirement isn’t something you want to wing. Talk to a financial advisor, make a strategy, and stick to it (preferably before you turn 85).

The Bottom Line

Pensions are disappearing faster than a politician’s campaign promises. But that doesn’t mean you’re doomed to a retirement of instant noodles and scratch-off tickets. Take control, build your own guaranteed income, and make sure your golden years are actually, well… golden.

Need help? Let’s talk. Because “winging it” is not a retirement plan.