Defined terms for the annuity market and lifetime income landscape.
Ruin probability is the chance that a process crosses an absorbing barrier — typically zero wealth in financial contexts — within a specified time horizon.
A run-off carrier is an insurance company that has stopped writing new business and is administering its existing book of contracts until those contracts terminate through claims, surrender, death, or other natural expiry, without acquiring new policy obligations.
Safe harbor annuity selection is the fiduciary process established by ERISA Section 404(e), as added by the SECURE Act, that — when followed — provides plan fiduciaries with statutory protection in selecting an insurance carrier to provide an in-plan lifetime income option.
Safe withdrawal rate is the initial percentage of a retirement portfolio that an individual can withdraw in the first year, adjusted for inflation in subsequent years, with a specified probability of the portfolio sustaining the withdrawals over a stated planning horizon.
