Glossary

A ratchet feature is a rider mechanic that locks in upward movements in the benefit base — or another rider-defined value — preventing subsequent decreases below the locked-in level, with the term used in some contracts as a synonym for the step-up provision and in others to describe a distinct mechanic with different timing or threshold rules. Why it matters The ratchet feature is named in commercial materials and contract documents alongside the step-up provision, and the relati

Real versus nominal income is the distinction between the actual dollar amount of an income payment (nominal) and that payment's purchasing power after adjustment for inflation (real), used to assess whether an income stream maintains its real-terms standard of living over time. Why it matters The real-versus-nominal distinction is the most consequential framing distinction in long-horizon retirement income evaluation. Two arrangements that look comparable in nominal terms may div

Realized value is the share of the theoretical pooling benefit that a real lifetime income product actually delivers, expressed as a fraction of what a frictionless pool could produce for the same individual at the same planning age. Why it matters Evaluating a lifetime income product on its own terms requires knowing how much of the theoretical pooling benefit it actually delivers. Realized value is that figure. Because the calculation requires a reference benchmark that sits out