You can, but there are some conditions and consequences.
If you want to increase the amount you save each month, you can do this at any time, and is basically the same as starting another pension plan – this can be linked to your current plan and means you will not have to pay an additional policy fee, but means that you will now have two end dates, one based on the duration you chose when you first started your pension plan, and another based on the duration you chose when you increased the amount you saved each month.
For example, if you started by saving $500 per month for 15 years, and three years later you wanted to increase it to $800 per month, you would have 12 years left on the $500 original pension plan, and would still have the options of 10, 15, and 20 years to choose from for your additional $300. You would not be able to have a 12-year term on the additional $300, because that’s not one of the duration options. It’s not a major problem – just something you need to be aware of.
It’s also something to think about when you come up to a 5-year anniversary, as that’s the perfect time to increase the amount you save if you want to keep the same end date for all your pension planning. For example, if you started with a 20-year duration, 5 years later you could add an additional amount with a 15-year duration, and the end dates would tie up perfectly. The only difference would be in relation to the minimum guaranteed value – which would be 160% of what you pay in over 20-years on your original monthly amount, and 140% of what you pay in over the 15-years on the amount you increased it by.
If you want to reduce the amount you save each month, you can do this any time after the initial period has been completed (subject to the minimum amount of $200 per month), but it does mean that you would lose the guaranteed minimum future value – because the guarantee is dependent on you sticking to the original plan. It’s still a good investment without that guaranteed minimum future value – but it’s one of the key features of this pension plan, and is highly valuable. It is better to pick a lower monthly amount at the start, that you can always realistically be able to afford, than it is to be too ambitious at the start, and then reduce the amount you save later on and lose that all-important guaranteed minimum future value.
As this is a commitment to Future You, try to view your pension plan as something you must pay, even if it means dipping into your emergency fund occasionally or taking money out of your other savings and investments, rather than reducing the amount you put aside for your future financial needs. Reducing the amount you pay into your pension plan would definitely count as compromising your finances, not optimising your finances.
It you’re looking for something with the flexibility to increase/decrease/pause/restart your regular monthly savings without any major consequences, check out www.SavingsForNomads.com. It features a savings plan designed for flexibility, with a lot more options than this pension plan. Ideally, if your circumstances allow, have both – that way you have your pension plan with a guaranteed minimum future value which you remain fully committed to, and your more general savings and investment plan which you can make changes to as you make your way through life, as well as adding and withdrawing random amounts when you want or need to.