Strategic Acquisition Brief · Confidential
Income in the default  ·  Confidential  ·  Prepared for Principal leadership

You have promised “predictable.” Here is how it becomes a number.

In one summer Principal put guaranteed income into the target-date default, added a fixed indexed annuity for the decade before retirement, and selected the clearing platform that will carry income products across recordkeepers. The delivery system is built. What it does not yet contain is the instrument that computes, for each of 13+ million individual customers, how large the floor should be, when it should start, and how it fits that household’s Social Security, Roth and tax facts. MaxiFi is that instrument: the only commercial engine built on the economics of lifetime planning, faithful to the science and to the law, and warrantable because it is.

BANKRATE · 2025 Named to Bankrate’s “Best financial planning software of 2025” — cited for near- and long-term tax planning and the decumulation phase; the only economics-based engine in the field.
13M+
Individual customers reached by Principal’s expanded retirement-income suite (June 30, 2026)
42 states
Plus federal tax, Social Security, Medicare and IRMAA rules, maintained continuously as provisions are released
30+ yrs
Of encoded, versioned law behind the one computed, reproducible lifetime answer
The Strategic Moment

Principal has decided what the cautious participant should have. Not yet how much.

On June 30, 2026 Principal broadened its retirement-income suite with three collective-trust options — the Principal LifeTime Income Builder Index, a target-date series that transitions into fixed indexed annuities; the Nuveen Lifecycle Income Index CIT with TIAA and Nuveen; and Income America 5ForLife — reaching, in its own words, 46,000-plus employers and more than 13 million individual customers. Chris Littlefield, President of Retirement and Income Solutions: “Our plan sponsor clients are looking for ways to make retirement simpler and more predictable for their employees.”

On June 16 Principal introduced Principal Income Protector, a fixed indexed annuity for people five to fifteen years from retirement. On September 15 it selected SS&C’s Retirement Income Clearing and Calculation platform to connect and administer the suite across recordkeepers. On September 1 it completed the acquisition of Beam Benefits, a digitally native benefits platform, announced eight weeks earlier. The second quarter (reported July 27) showed the retirement segment growing nine percent on the top line and eleven on the bottom, with transfer deposits up thirty percent.

What the suite promises, in Principal’s own release.

Income of six percent at activation and a minimum of 4.5 percent for life — stated as targets, with no guarantee of achievement. The promise is population-level. The participant’s question is household-level: how large should my floor be, when should it start, and what does it do to my Social Security, my Roth conversions and my spouse? Nothing in the suite, the glide path or the clearing platform computes that. This is the layer that does.

Risk Is an Option, Not a Starting Point

Income in the default is safety-first planning. The science agrees with you.

Conventional planning gets the first thing wrong: it never asks whether a household needs to take risk at all. It sets a spending target, usually too high, and adds equity to raise the probability of hitting it. The economics of lifetime planning begins where Principal’s default begins: with the most a household can sustainably spend with no investment risk, computed jointly across its whole life under the taxes and benefits the law actually imposes, and then treats risk as an option, evaluated against the household’s own aversion to loss.

Safety-first planning, then risk as the household’s option. In that order. That is the science, not the software.

Laurence Kotlikoff’s illustrative case shows what the premise is worth to an illustrative cautious household: a hypothetical 62-year-old retiree with $2 million and Social Security.

StrategySustainable discretionary spendingVersus the safe base, in the household’s own terms
Safety-first (TIPS-only base)$83,451 / yr to age 100The base case: no investment risk at all.
80/20 stocks and bondsFar higher expected, much greater dispersion22% worse if the household is highly risk-averse; 22% better if it is risk-tolerant.
20/80 stocks and bondsModestly higher expected9% worse if the household is highly risk-averse; 6% better if it is risk-tolerant.
Claim Social Security at 70 and time Roth conversions+ $8,608 / yrRisk-free. Computed, not guessed — the part of the answer no glide path produces.

Figures are Professor Kotlikoff’s, as of October 2026, for his illustrative household’s facts and assumptions; they are not generalized. The plan depends on the person, and conventional planning never asks.

Why this is Principal’s question.

The participant in a default is cautious by selection; the income default exists because Principal concluded that person should be protected from the market at the end. The size of the floor for each household is a computed quantity. An engine that begins from safety is the only kind that can compute it. An income election is lifelong and must hold for the survivor; computed wrongly, it is a claim, not an approximation.

The Layer

The platform connects the products. The engine computes the household.

MaxiFi is not an application Principal would operate. It is a computation service the default, the managed account and the advisor all call. From the plan and payroll data Principal already holds, it produces for each participant the safe base including the income product, the activation timing that fits that household’s Social Security claiming and Roth sequence, and the risk the household may choose to take on top. The participant’s experience does not change. The provenance of the number on it does.

Principal owns
The promise and the delivery. The income suite, the fixed indexed annuity, the SS&C clearing platform, the recordkeeping relationship with 46,000-plus employers, the advisor network.
MaxiFi supplies
The household’s number. How large the floor, when it starts, and how it fits the rest of the household’s lifetime — solved jointly, computed under current law, the same facts producing the same auditable answer, and therefore warrantable.
The participant sees
The same statement, the same default, the same advisor. With a number that can be explained, defended in an RFP, and stood behind.

Renting the answer, or owning it.

A rented planner cannot be warranted, because its spending target comes from outside the model and there is no correct answer to warrant. An owned engine that is faithful to the economics and computes under current law can be. That difference is the claim Fidelity, Empower and Voya cannot make.

The Engine

The science is the source of truth. MaxiFi is its faithful instrument.

The life-cycle economics of saving, spending and risk has been taught in graduate finance for seventy years. MaxiFi is the only commercial engine built on it, and it is faithful to the science in two layers. The economics: safety-first, spending endogenous, the lifetime solved jointly, risk evaluated as an option against the household’s own risk aversion. The law: federal and forty-two state tax codes, Social Security, Medicare and IRMAA, required minimum distributions, Roth conversions, pensions, annuities and survivor benefits, encoded and maintained for thirty years, deterministic in the sense that matters — the same facts produce the same auditable answer. The problem is well-defined, so the answer can be checked by inspection, line by line, in the reports.

When a technology team says “we could build this,” the answer is not the algorithm. Dynamic programming is taught. The answer is the classes of failure in which a rebuild silently ships a wrong number:

Survivor benefitsThe plan must be right for the survivor, not only the couple.
Forty-two state tax codesResidency and retirement-income treatment change the answer.
IRMAAOne dollar of income can add thousands of dollars of Medicare premiums.
RMDs × Social Security taxationDistributions change how much of a benefit is taxed.
Pre-1954 Social Security rulesStill governing some claimants.
Cash-flow-constrained households in a downturnA plan that ignores the constraint forces early claiming.
Longevity, not life expectancyThe floor must hold to age 100, not to the average.
Joint optimizationComponents that are independently correct fail when combined.

Patent-winning. Named to Bankrate’s best financial planning software of 2025. Used by Robert Merton to teach financial planning at MIT Sloan. Built over thirty years by Boston University economist Laurence Kotlikoff, who intends to stay with the acquirer as architect and spokesperson.

The Guarantee

Warrant the fidelity, never the outcome.

For a participant’s facts and assumptions, the plan MaxiFi produces is the plan the economics prescribes, computed under current law. Because the result is verifiable by inspection, a computational error is objectively decidable: rerun the engine and check. That is why a bounded accuracy guarantee with a stated exclusive remedy is insurable for an engine that owns its computation, and is not offerable by a planner whose target is set outside the model. Market returns, longevity, future law and the participant’s own assumptions are never guaranteed. The guarantee covers the arithmetic and the fidelity, not the life.

What the guarantee does for Principal.

It converts “predictable” from a promise into a claim Principal can make in a sponsor RFP and on a participant statement, stand behind with a defined remedy, and deny to every rival. We are not selling an insurance policy. The insurance is included.

The model guesses. The engine computes. The science decides what to compute.
The Proof, Dated

The gap has been measured by people with nothing to sell.

Independent tests in 2026 established that the market cannot check its own arithmetic. Larry Kotlikoff’s Economics Matters Substack has run named head-to-heads against frontier engines on dollar-specific household problems; the variance across engines on identical prompts is the proof that correctness cannot come from the model layer.

August 14, 2026
Conventional planning doesn’t get the first thing right about investing: assessing risk
The illustrative case above. For a cautious household the industry’s standard answer is not approximately right; it is wrong in that household’s own terms.
Read the risk premise →
June 2026
Journal of Financial Planning: identical households, seven AI systems
A peer-reviewed study (Nicolini, Cude and Chatterjee) found statistically significant variance in AI financial recommendations and bias in retirement withdrawal recommendations.
Peer-reviewed, June 2026
May 28, 2026
Federal bracket-filling to Roth conversions
A frontier model’s Roth-conversion sequencing tested against MaxiFi’s optimized path on the same household facts: MaxiFi’s computed strategy came out 72.7% better.
Read the Roth test →
May 7, 2026
CBS MoneyWatch: three engines, three answers
A national-press test in which a frontier model withdrew its own retirement answer, and MIT’s Andrew Lo observed that an AI bears no best-interest duty.
National press, May 2026
April 27, 2026
Beware of AI’s Social Security “advice”
“AI tells Jane a job change adds at most $35K in lifetime benefits when the right answer is $168K.” The claiming decision is the one a Principal income default must get right.
Read the Social Security test →
March 20, 2026
Genuine versus Artificial Intelligence
“The AI said John and Jane can spend approximately $52,000 per year in discretionary spending. MaxiFi’s answer, verifiable by inspecting its reports, is $63,382.”
Read the head-to-head →

How will you validate that any AI is correct? You will need to run MaxiFi to know. Correct means faithful to the economics; the instrument that can certify the AI is the faithful implementation of the science, computed under current law, today and after any attempted replication.

The Strategic Case for Principal

The propellant of the trajectory you have already declared.

Principal’s trajectory is income in the default for the cautious participant, at a scale of 46,000-plus employers and 13-plus million people, in a race with Fidelity, TIAA and Voya that will be decided by whose income allocation is personal and defensible. MaxiFi is not an addition to that trajectory. It is what completes it. The firm that secures it holds a unique and durable competitive advantage: an economic moat against AI, and a legal moat against claims of improper advice.

1

The default becomes personal, and provable

Every participant’s floor, activation date and claiming sequence computed for that household under current law, and explained as arithmetic. The promise of “predictable” becomes a number a sponsor can audit and a participant can trust.

2

The RFP claim no rival can make

The one recordkeeper whose income allocation is faithful to the economics and warranted with a defined remedy wins the sponsor conversation on a dimension Fidelity, Empower and Voya cannot enter. The claim persuades; the guarantee closes.

3

Roll-ins, transfers and the advisor network

A computed lifetime plan identifies the precise household need at the precise date it arises — the roll-in, the income product, the protection product. That is a materially different conversation from a probability of success, and it runs through the advisor and managed-account channels Principal already operates.

4

The defense, included and denied

A fiduciary is judged against the economics, not against any vendor’s product. The firm whose allocation is faithful to the science has the defense; the firm whose tool is not has the exposure. The defense comes with the deal. The deal is the growth.

Why own rather than rent.

The glide path decides a population’s allocation; the clearing platform moves the money; neither decides the household’s number, and the household’s number is what the fiduciary question is about. A rented planner cannot be warranted. An owned engine can, and there is exactly one MaxiFi.

The Next Step

A 30-minute orientation to MaxiFi.

MaxiFi is offered for acquisition: the engine, its intellectual property, thirty years of encoded law, and Larry Kotlikoff’s continued involvement as architect and spokesperson. The next step is a 30-minute orientation: the safe base case for a real, anonymized household first, then the risk question, then a frontier model asked to match the result. Nothing is deployed and nothing is left behind; evidence deepens with commitment, and the full case is provable in an acquirer’s first quarter of ownership. First conversations with strategics are underway; we expect to narrow the field in early November.

Advisor & Contact
Michael Kane, Ph.D., J.D.
Managing Partner, Kane & Company
A Private Investment Bank · Member FINRA / SIPC
34 years of M&A and investment-banking experience
Commerce@kaneco.com · 310-441-5263
Representing
Economic Security Planning, Inc.
Developer of MaxiFi & the MaxiFi Planner platform
Architected by Prof. Laurence Kotlikoff, Boston University

Or write directly: Commerce@kaneco.com · subject “MaxiFi — Principal orientation.”