Developing and maintaining a robust financial plan in retirement is a classic actuarial problem involving the time-value of money and life contingencies. This problem is easily solved with basic actuarial principles, including periodic comparisons of household assets and spending liabilities.
In accordance with Section 105(a)(2) of the Employee Retirement Income Security Act (ERISA), as amended by the SECURE Act of 2019, defined contribution plan sponsors will soon be required to disclose two lifetime income stream equivalents (LISEs) of a participant’s current account balance under the plan at least once during each twelve-month period in participant benefit statements. The two required LISEs are:
