Those looking for a longer explanation of BlackRock's just-released Cori
products get a more in-depth take in the Wall Street Journal
. Reporters Kelly Greene and Tom Lauricella explain how retail investors can use Cori to calculate where they are on their retirement track. The two reporters fail to delve into the mechanics of how the index works.
Simply put, Cori provides a price that BlackRock's quants calculates would be charged by an insurer for an immediate annuity sold today that would start in the year of the index.
To quote the paper:
For example, the index's closing price July 30 for an investor turning 65 in 2018 was $16.06, meaning it would take that amount to generate $1 in annual income for life starting at age 65. An investor who saved $750,000 could divide it by $16.06 to determine that those savings could generate an estimated $46,700 a year, the firm says.
The article notes that BlackRock "failed to get much traction among investment platforms or plan sponsors" for an earlier, annuity-based product (SponsorMatch, and a product that sources have told the MFWire received no uptake from plan sponsors).
The paper reasons that employers are "waiting for the U.S. Department of Labor to propose rules governing lifetime-income options before expanding those offerings."
Sean Hanna, Editor in Chief
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