Is personal pension investment really a steady profit?

The answer is not necessarily. We must be psychologically prepared for this in advance. To understand this problem, we must first understand what the money in the personal pension is for.

First of all, the money in personal pension can be used to buy savings deposits, commercial pension insurance, wealth management products, Public Offering of Fund and other financial products. To put it bluntly, the product of savings deposit is long-term time deposit, which is characterized by long purchase period and preference for capital preservation, but it is still higher than the normal time deposit interest rate. However, wealth management products and Public Offering of Fund products have volatility and high risk, and the long-term investment yield is also high. Of course, it is risky in theory, and it is not excluded that the rate of return is relatively low or even loss at a certain point. The risk and yield of commercial endowment insurance products are between savings deposits, wealth management products and Public Offering of Fund products.

Secondly, although there are losses and gains in theory, in fact the gains are guaranteed. Personal pension account has the characteristics of closed accumulation and long-term investment, and it is not allowed to withdraw in advance except in special circumstances such as retirement, so it is more reasonable to evaluate the long-term rate of return. It is normal for short-term income to fluctuate, but if the cycle is lengthened and accumulated for twenty or thirty years, the long-term income of individual pension accounts is guaranteed. For example, the annualized rate of return of the National Social Security Fund in the past 20 years has exceeded 8%, and the annualized rate of return of the enterprise annuity in China has also exceeded 7% since 2007. Facts have proved that pension investment represented by social security fund and enterprise annuity can achieve long-term stable income, and personal pension accounts will adopt similar investment methods in the future. Long-term returns must be considerable, so don't worry too much about short-term fluctuations.