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Retirement Planning > Retirement Investing

Annuity Group Unveils Retirement Readiness Benchmarking Tool

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A group that promotes use of annuities in retirement income planning is introducing a tool that Americans as a people could end up using to determine how well, or poorly, they are prepared for post-retirement income needs.

The Alliance for Lifetime Income hired Milliman, an actuarial consulting firm, to develop the new Retirement Income Security Evaluation Score, or RISE Score.

(Related: Companies Make Big Push for Lifetime Income Awareness)

The RISE Score system can assign a user a retirement readiness score, on a scale of 0 to 850, based on answers to a few questions about demographics, retirement savings, projected retirement expenses, and expected sources of retirement income, the alliance said today in a RISE Score launch announcement.

Other groups offer retirement calculators, but the RISE Score tool appears to be the first that provides a retirement income risk indicator, the alliance said.

The alliance and other organizations may eventually be able to use the RISE Score system to compare how various groups of people are doing at preparing for retirement income needs, and to show how people’s retirement income preparation efforts are changing over time.

Life insurance agents and other financial professionals can use the tool to start conversations with clients and prospects about income planning efforts.

One hypothetical test case involving a single 55-year-old female with $200,000 in current savings, an anticipated retirement age of 65; expectations of having about $1,450 per month in Social Security income and health and living expenses of about $3,500 per month; and a willingness to put half of the portfolio in an annuity produced a RISE Score in the 700 to 750 range, which was classified as good.

For a similar female with an anticipated retirement age of 75, the readiness score was listed as being over 750, or in the ‘excellent’ category.


The RISE Score tool is available here. (Temporary issues, such as surges in traffic due to media coverage, may sometimes cause the tool to go offline.)

— Read Companies Form Lifetime Income Outreach Alliance, on ThinkAdvisor.

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