Lifespan Based Planning

Lifespan based planning allows you to model realistic income plans in which, after a spouse passes away, retirement income changes, one Social Security stream disappears and pensions and annuities switch to lower benefit.

Each member's lifespan is set in a percentile, which represents the percentage of the member's gender and age cohort that the retiree is expected to outlive. The lifespan in years is also shown for convenience. The actuarial data for the lifespan is currently based on 2016 Social Security Period Life Table. 

By planning based on lifespans, the application is aware of the event of a spouse passing away and that event can be used to configure many aspects of the plan. For example, income level or Social Security claim method can be changed or cash flows can switch to a lower benefit for the survivor. Details for those steps are outlined below:

Retirement Expenses: You can set the number of years a retirement expense is expected as a fixed number of years or defined in terms of each household member's life.

Social Security: Benefit start age and end age can also be defined in terms of the member's lifetimes. Edit the data in either the Benefit Start Age or Benefit End Age columns in the Strategies tab, Social Security panel by using the  or double clicking the row and scrolling down to see the lifespan based options.

Incoming Cash Flows: You have the option for configuring to the member of whose life the cash flow is linked and if it is linked to joint life, then the survivor benefit is also setup. For joint life cash flows that have no reduction in benefit tied to death of a spouse, configure the survivor benefit as 100%. 

Income, Fixed and Variable Annuities: Similar to Incoming Cash Flows, annuities can also be linked to the life of any of the household member or their joint lives with a survivor benefit. 

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