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BlackRock launches retirement income indices


BlackRock has launched a series of financial indices that aim to improve the way individuals and their advisors plan and save for retirement.

The BlackRock CoRI Retirement Index series (CoRI Indexes), backed by the firm’s analytics, will enable an investor or advisor to calculate either of two critical figures: (1) how much estimated annual income an investor’s savings will provide throughout retirement, or (2) the level of savings an investor needs to generate a desired amount of annual income throughout retirement.
Because the CoRI Indexes are designed to reliably translate savings into estimated lifetime income, investors can also use a CoRI Index as a benchmark for monitoring retirement portfolio performance relative to an income goal, and/or in the course of designing and implementing a retirement income-focused investment plan.
“The CoRI Indexes will deliver truly groundbreaking support for investors grappling with today’s most critical financial planning question: ‘Do I have enough money to retire?’,” says Chip Castille, managing director and head of BlackRock’s US & Canada defined contribution group. “By distilling investors’ retirement income need into a single number that can be accessed easily and checked regularly, the CoRI Indexes will offer an invaluable new starting point for retirement planning as well as support better informed discussions between investors and advisors on strategies for securing critical retirement income.”
Unlike traditional retirement planning “calculators” that rely on user assumptions and hypothetical inputs to generate a result, the CoRI Indexes are based on real-time market data and a broad-based portfolio of fixed income securities.
The CoRI Indexes are designed to assist investors age 55 and older in planning for retirement by tracking the estimated cost of USD1 of future, annual inflation-adjusted lifetime income beginning at age 65, better equipping those investors to make necessary adjustments to their savings or investing strategy during the “pre-retirement” period when good planning and appropriate course-correction are vital.
The value or “level” of each CoRI Index in the series reflects the performance of a portfolio of corporate US dollar-denominated bonds, US government bonds and US Treasury STRIPS (Treasury securities with separate interest and principal payments) that have been selected to deliver a return that approximates the cost of a person’s lifetime income as it fluctuates over time.
Based on proprietary methodology developed by BlackRock, a CoRI Index level is designed to converge with the median price of an annuity at age 65.
The ability to provide such a tangible metric through the familiar and transparent concept of an index makes the CoRI Index series an important innovation for the retirement investment landscape.
“With all the uncertainty in the financial world, coupled with ever-lengthening lifespans, what investors need most is a clear and reliable way to see the years ahead,” says Castille. “A CoRI Index is a powerful lens for bringing an investor’s future into sharp focus – in a way that investors have never been able to achieve before.”
The CoRI Index series is designed primarily for individuals from 55 to 64 years old. Each Index within the series is constructed with a view to the specific year in which those individuals will retire (assumed to be at the age of 65). The current series includes 10 Indexes, from the BlackRock CoRI Retirement Index 2014 through the BlackRock CoRI Retirement Index 2023. A new index will be added every year.
In each case, a CoRI Index will provide a single number that a saver can use to calculate the amount of money needed today for every dollar of estimated annual income he or she wants in retirement.

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