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.
- Start with the Actuarial Financial Planner (AFP) Workbook
The AFP workbook is the cleanest way to gather the inputs required for an actuarial funded‑status calculation:
- Assets
- Guaranteed lifetime income streams
- Essential and discretionary recurring expenses
- Essential and discretionary non‑recurring expenses
- Lifetime planning period (LPP) assumptions
- Discount rate(s)
If different discount rates are to be used for essential expenses/non-risky assets and discretionary expenses/risky assets, the spreadsheet will ask you to quantify the percentage of such assets you or your client considers to be risky and the percentage of such expenses you or your client considers to be essential or discretionary. For example, investments in bonds may be considered to be 70% non-risky and 30% risky.
Include sales of future assets (like a home) if they are intended to be used to fund retirement.
Assets expected to be received in the future and spending amounts expected to be paid in the future should be entered in future dollars (i.e., increased from today’s dollars with assumed inflation).
Once the workbook is completed, users can simply upload it directly into Copilot. Copilot can read the inputs and compute:
- Present value of spending liabilities, essential and discretionary
- Present value of assets, non-risky and risky
- Current funded status
- Survivor‑phase funded status
- Year‑by‑year funded‑status trajectory
This eliminates transcription errors.
- Ask Copilot to Interpret the Results
The actuarial approach produces clean, stable numbers — but users often need help interpreting them. Copilot excels at this.
Examples of useful prompts:
- “Interpret my funded status using the actuarial approach.”
- “Explain whether my discretionary spending is sustainable.”
- “Analyze my survivor‑phase funded status.”
- “Evaluate whether my discount rates are reasonable.”
- “Stress‑test my plan using a lower return assumption(s) or higher assumed inflation.”
Copilot can also explain the why behind the numbers — something most tools cannot do.
- Use Copilot for Scenario Analysis and Stress Testing
Because the actuarial approach is deterministic and transparent, Copilot can easily run:
- Longevity sensitivity
- Return‑assumption/discount rate sensitivity
- Spending adjustments
- Custom return paths
- Shock scenarios
This gives advisors and DIYers a powerful way to explore “what‑if” questions without modifying the workbook itself.
- Use Copilot as the “Interpretation Layer” — Not the Calculation Engine
The Actuarial Financial Planner workbook is the actuarial engine. Copilot is the analysis layer.
This division of labor is intentional:
- The workbook ensures actuarial rigor and transparency.
- Copilot provides interpretation, explanation, and scenario analysis.
This avoids feature‑creep in the workbook while giving users a flexible analytical companion.
- Advisors Can Use Copilot as a Client‑Facing Tool
Advisors can upload a client’s completed workbook and ask Copilot to:
- Summarize the client’s funded status
- Explain the sustainability of current spending
- Identify risks
- Suggest adjustments and risk management approaches
- Provide plain‑English explanations for clients
This turns Copilot into a virtual actuarial analyst — one that works instantly and can tailor explanations to any level of sophistication.
- What Users Do Not Need to Provide
Copilot does not require:
- Tax modeling
- Portfolio allocation details
- Monte Carlo parameters
- Detailed budget categories
- Historical return data
The actuarial approach is deliberately simple and stable. The AFP workbook already contains everything required.
Summary
To use Copilot with the Actuarial Approach, simply complete the Actuarial Financial Planner workbook and upload it to Copilot. Copilot can read the inputs, calculate the funded status, interpret the results, and help you explore alternative scenarios.
