Imagine having the precision of an actuary at your fingertips—well, now you can!
The Actuary Lab is Core Income’s proprietary suite of risk management tools designed to help financial advisors enhance their retirement planning strategies and navigate client portfolios with precision. These tools will help you strengthen your recommendations and improve client outcomes like never before.
Interested in a demo? Reach out to our team at info@coreincome.com, and we'll set one up!
With Actuary Lab, you can take control of complex technical concepts like inflation, longevity, internal rate of return, and sequence of returns and turn them into simple, customized reports for your clients.
Since 2012, Core Income has utilized concepts from actuarial science to help advisors deliver financial certainty. Now, with Actuary Lab, those same tools are available for you to use directly, putting you in the driver’s seat of the math.
Built from years of actuarial expertise and refined through advisor feedback, the Actuary Lab is designed to benefit your practice and support your client conversations. It’s your solution for delivering more precise, effective, and personalized retirement plans.
Financial advisors can access the Actuary Lab via Core Connect. If you don't have a login yet, email info@coreincome.com or call 800.541.7713, and we'll get you set up.
The Tools
The Actuary Lab includes four proprietary tools designed to help financial advisors mitigate risk with mathematical precision:
Longevity Tool: Life expectancy and longevity aren’t the same. Use this tool to explore financial outcomes at different stages of your clients’ lives.
Internal Rate of Return Tool: Cash flow analysis evaluates the timing of money in versus money out. With this tool, you can simplify the mechanics of insurance down to a single number.
Sequence of Returns Tool: A bad market year at the start of retirement can reduce your clients’ savings by up to 10 years. This tool helps you illustrate how different market conditions could impact your clients’ retirement based on their inputs.
Inflation Tool: Inflation is compound interest working against you. This tool helps you demonstrate to clients how inflation can reduce their spending power throughout retirement.
We are continuously developing more tools in the Actuary Lab to assist financial advisors in minimizing their clients’ risks with actuarial precision. We revise our tools based on advisor feedback, so we’d love to hear what you think of them, the features you’ve found most helpful, and what you hope to see added.
Let’s dive into how each tool can benefit you and your clients.
Longevity Tool
Are you planning for your clients' life expectancy or true longevity?
At Core, we often see a widespread misunderstanding of how to avoid outliving one's money in retirement. That's where our Longevity Tool comes in. It helps you facilitate conversations with clients about what it means to plan for living longer than expected.
Longevity analysis goes beyond the standard concept of life expectancy - it evaluates the likelihood of living to any future age, providing a more cautious and realistic outlook on retirement planning.
Most people plan around life expectancy, the single-point age by which 50% of people will have passed. But the reality is that there’s a 50% chance of living beyond that age. For example, a 65-year-old man retiring today has a life expectancy of 88 years. If you use age 88 in your planning process, there’s a 50% chance your client will run out of money if they live longer. That’s why it’s crucial to speak in terms of longevity, not just life expectancy.
The Longevity Tool allows you to analyze key life stages and probabilities, using three key longevity points to build a more prudent retirement plan: the 1-in-2 event, the 1-in-4 event, and the 1-in-10 event. For example, a 65-year-old male has a 50% probability of living to age 88, a 25% chance of living to age 93, and a 10% chance of living to age 98.
This tool also helps facilitate conversations about how a couple would manage this risk. Joint longevity represents the lifespan of the longer-living partner in a couple, an age that is often underestimated.
Internal Rate of Return Tool
Internal Rate of Return (IRR) is an actuarial metric used to assess the profitability and attractiveness of an income stream. This calculation, based on the time value of money and similar to net present value, allows financial advisors to analyze and compare different cash flow streams over time.
Insurance company actuaries use IRR to price their products, so why not apply the same method to evaluate your clients’ money? By focusing on the timing and amount of cash inflows and outflows, the IRR Tool strips away the marketing noise from insurance products and provides a clear, unbiased comparison. Essentially, IRR allows you to simplify the mechanics of insurance down to a single number.
With this tool, you can quickly determine the IRR for any client scenario, providing valuable insights for making informed recommendations.
For example, we worked on a case for an advisor’s client who had an annuity with $800,000 in cash value and an income rider worth $1.4 million. At 71 years old, the client was eager to take advantage of a 7% roll-up to increase the income value for two more years by nearly $100,000 each year and delay income activation. However, by using the IRR Tool, we showed that although the payment would be higher ($80,143 versus $70,000), waiting would decrease the IRR by 60bp per year (6.5% down to 5.9% at LE1), as the client would forgo two full payments while waiting. This analysis helped guide the client toward the decision to activate the income rider sooner rather than later. The extra payment today was worth more than the higher payments in the future – and hey, who doesn’t mind another year of income?!
This tool enables advisors to have many different conversations specific to each client’s financial situation. But the true power of the IRR tool lies in its ability to support advanced cash flow analyses across various products, such as annuities, life insurance, and long-term care.
Sequence of Returns Tool
Will your clients be lucky to start retirement in an up year, or will they face the challenge of beginning in a down year? The Sequence of Returns Tool helps you demonstrate to clients how market movements can impact their retirement savings.
All investment accounts are susceptible to market swings, but retirement accounts taking income are unique. They’re notably vulnerable, especially when a market downturn occurs in the years immediately before and after someone retires. This is when savings are at their highest and withdrawals begin. A market downturn during this critical period can have long-lasting, even devastating effects on a retiree’s financial security.
Even if two investors start retirement with the same amount and take the same withdrawals, they can have very different results due to how different the markets perform when they begin retirement. A down year at the start of your clients’ retirement could reduce their savings by as much as 10 years.
Don’t leave your clients’ financial future to chance. With the Sequence of Returns Tool, you can take a personalized approach to addressing this risk. The tool allows you to tailor your conversations by inputting each client’s details, such as age, portfolio balances, desired income streams, and the market returns and variance that match their profile.
By utilizing this tool, you can help your clients understand how to safeguard their retirement income, no matter how long they live or how the market performs.
Inflation Tool
Inflation may seem like a quiet, subtle assumption, but over time, it can have a profound impact on your clients’ financial plans and significantly reduce their future spending power — read more here.
While compound interest typically works in your client’s favor during accumulation, inflation flips the script once they retire. It works against them by reducing the real value of money over the long term.
As a financial advisor, you may estimate inflation at 2% or 3%, adjusting your client’s expenses accordingly. However, our Inflation Tool goes beyond basic assumptions. It allows you to tailor inflation projections to each client’s unique situation and cash flow. With customizable inputs and dynamic reports, this tool helps you illustrate how inflation can affect your client’s income and purchasing power throughout their retirement.
Getting Started with Actuary Lab
Actuary Lab is a simple, easy-to-use resource for financial advisors interested in utilizing actuarial strategies to minimize their clients’ risks.
Accessing it is easy: just log in to Core Connect from our website (upper right corner), head to the ‘Resources’ tab, and select ‘Actuary Lab’ from the dropdown menu.
If you don't have a Core Connect login yet, email info@coreincome.com or call 800.541.7713, and we'll get you set up.
Once you’re in, feel free to explore the tools on your own or schedule an educational meeting with your Core success team. If this is your first time using Actuary Lab, we recommend a 20-minute Zoom session with our team to walk through the tools and answer any questions. Our team can share the countless ways financial advisors have already successfully positioned these risk management concepts for thousands of clients.
Remember, we’re always here to support you by running the reports if you'd prefer. The Actuary Lab is a resource for advisors who enjoy diving into the details, but if you'd rather leave it to us, we're more than happy to take care of everything. It's what we’re here for!
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Core Income is an FMO, IMO, and independent insurance brokerage dedicated to serving financial advisors, their staff, and their clients.
Our mission is to help advisors deliver financial certainty by supporting them through actuarial precision, elite responsiveness, and collaborative partnerships.
To learn more about how we can support you, schedule a consultation with our team or call us at 800.541.7713.
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