How Do You Retire Without a Pension? Building Your Own Income Floor

How Do You Replace Pension Income?

A pension does one thing: provides guaranteed monthly income for life. Without one, you need to build that guarantee from other sources.

Source 1: Social Security. Delay to 70 for maximum guaranteed income. For a couple with average earnings, combined SS at 70 can be $5,000-$7,000/month. This IS your pension — the most cost-effective one available.

Source 2: Bond/CD ladder. 5-10 years of spending in sequenced maturities. Provides predictable income without market risk during the critical early retirement years.

Source 3: SPIA (optional). Convert $200,000-$400,000 of portfolio to a guaranteed income annuity. At 65, a $300,000 SPIA might pay $1,700-$1,900/month for life.

Source 4: Roth accounts. Not guaranteed income, but tax-free withdrawals provide flexibility to adapt to changing circumstances without tax consequences.

What Does This Look Like in Practice?

Example (couple, no pension): - Social Security (delayed to 70): $5,800/month combined - Bond ladder (first 7 years): $3,000/month from maturing bonds - SPIA ($250,000): $1,400/month for life - Total guaranteed income floor: $7,200-$10,200/month

This exceeds many pension amounts. The portfolio beyond these allocations grows for legacy, flexibility, and late-retirement healthcare. The analysis models this income floor approach alongside the standard total-return approach.

Want to Build Your Income Floor?

The analysis at myaifinancialplan.com models the income floor strategy — showing how Social Security, bond ladders, and optional annuities combine to replace pension-like income. Start free at myaifinancialplan.com.