Retirement planning is often dominated by withdrawal rules, Monte Carlo probabilities, and portfolio‑centric heuristics. But none of these tools directly measure the core financial question every retired household faces: Can my assets support the lifetime spending I want—including the occasional big purchase—without jeopardizing long‑term solvency?
The actuarial answer is funded status.
Many users have told me they aren’t always sure how to enter their assets and spending liabilities into the Actuarial Financial Planner (AFP) Excel workbooks. That’s completely understandable — the actuarial approach is powerful, but it’s also more detailed than traditional “safe withdrawal rate” tools.
To make things easier, Microsoft Copilot can now review your completed AFP workbook and provide a clear, structured summary of what you entered — along with comments on your actuarial funded status.
Retirement researchers increasingly recognize that real spending does not remain flat throughout retirement. As Dr. David Blanchett emphasized in his recent Think Advisor article:
“Integrating reduced real spending into retirement income models not only improves the outcome of decisions around appropriate portfolio withdrawal rates, but also optimal portfolios, allocations to lifetime income, and so forth. Therefore, the more widely reduced real spending is leveraged in retirement research and financial planning tools, the more realistic the guidance is going to be.”
Households often have assets they expect to use during retirement that are not level streams of income, as well as expenses that are not expected to recur every year. These items need special handling in the Actuarial Financial Planner (AFP) because they occur at specific future dates and often carry different risk characteristics than ongoing retirement spending.
We have recently received inquiries as to how to use Copilot to implement the Actuarial Approach. Copilot can use different data sources to provide reasonable results, but we recommend that you provide Copilot with the specific data required by the Actuarial Financial Planner. This post explains the best way to use Copilot — whether you are an advisor working with clients or a retiree managing your own plan.
Prudent retirement planning requires using a planning horizon longer than your life expectancy. In prior posts we have recommend using the Actuarial Longevity Illustrator and the three-step process outlined in our Advisor Perspectives article to select your household lifetime planning period(s). In this post, we will once again discuss the importance, in planning and retirement decision-making, of focusing on how long you plan to live, not on how long you expect to live.
The 2026 OASDI Trustees Report was released today. Last month, we estimated that Social Security’s long‑range actuarial balance as of January 1, 2026 would be –4.14% of the present value of taxable payroll over the next 75 years (down from –3.82% in 2025), corresponding to a funded status of roughly 76%. Our estimate turned out to be optimistic.
We recently came across a Monte Carlo modelling tool called the Retirement Probability Simulator (RPS). It is a free tool available at DIYretiree.com that our readers may find useful in their financial planning.
In this post, we will discuss the similarities and differences between our Actuarial Financial Planner (AFP) model for retirees and near retirees and the RPS (for retirees and pre-retirees) and how they can work together.
We are pleased to announce that Microsoft Copilot is now an integrated part of our “How Much Can I Afford to Spend in Retirement?” team. Copilot enhances our actuarial approach by providing structured reasoning, rapid scenario analysis, and clear explanations of complex financial tradeoffs.
We recently asked ChatGPT two questions about using the Actuarial Approach and its Funded Status metric to evaluate a household’s retirement sustainability. ChatGPT had high praise for the Actuarial Approach.