Methodology and Assumptions:

Model Portfolios:

The tool includes illustrative BlackRock Target Allocation ETF Model Portfolios (“BlackRock Model Portfolios”) with a range of risk levels to select from. The BlackRock Model Portfolios reflect the types of core equity and fixed income exposures that are commonly included within diversified portfolios. The universe of investments available in the BlackRock Model Portfolios is limited to iShares exchange-traded funds (“ETFs”). This information is intended to provide potential investment options, but is not comprehensive investment advice. An investor’s retirement needs may be influenced by a variety of factors that are not included in this analysis. Investors should consult with their advisors to help evaluate their retirement needs and consider the information provided by the tool. Other investments not available in the tool may have characteristics similar or superior to those that are included.

The BlackRock Model Portfolios are analyzed using BlackRock’s multi-factor methodology based on the risk and return characteristics of five basic asset class exposures (U.S. equity, non-U.S. equity, U.S. rate (bonds), non-U.S. rate (bonds) and U.S. credit risk). For purposes of determining the risk and return characteristics of the BlackRock Model Portfolios, BlackRock analyzes the risk characteristics of each model portfolio’s underlying holdings.

With respect to the analysis performed by the tool, BlackRock does not evaluate the risk characteristics of the underlying holdings of any Lincoln Core IncomeSM variable annuity. Rather, the tool includes the Core Income Payment that a selected amount allocated to a Lincoln Core IncomeSM variable annuity would provide, as described in the Estimated Annual Retirement Income Range discussion below.

Estimated Annual Retirement Income Range:

The tool takes into account each user’s inputs, including the investor’s current age, retirement savings, anticipated retirement age, desired retirement income, risk level and selected amount allocated to a Lincoln Core IncomeSM variable annuity. The estimated annual retirement income range represents a projected range of annual retirement income derived by first growing the investor’s current retirement savings (less any amount allocated to Lincoln Core IncomeSM and additional annual savings from now until the investor’s anticipated retirement age by the assumed return of the selected BlackRock Model Portfolio. The assumed return of the BlackRock Model Portfolio is calculated using each applicable asset class's assumed return. Please refer to the Long-term Capital Market Assumptions discussion below for the assumed return and assumed risk figures for each asset class.

Next, the investor’s projected BlackRock Model Portfolio balance at retirement is divided by the corresponding projected CoRI value in order to calculate an average estimated annual retirement income. The low and high estimates reflect the assumed volatility (risk) of the components of the BlackRock Model Portfolio, as well as the assumed volatility (risk) of lifetime retirement income costs as measured by BlackRock’s CoRI methodology. CoRI values are updated daily, so results may vary with each use and over time. CoRI values and BlackRock's CoRI methodology are designed to help estimate today's cost of generating each dollar of future annual lifetime income in retirement, and take into account current interest rates, inflation expectations, life expectancy and other factors. Such estimates are not guaranteed. A number of factors may contribute to variations in retirement income. For example, the CoRI methodology does not reflect the fees, expenses and cost that may be associated with an annuity or any other retirement income product that an individual may purchase, nor does it reflect any assumption that such a product will be available for purchase at the time of retirement.

These annual retirement income estimates are generated using a statistical modeling technique that forecasts a set of potential future outcomes based on the variability or randomness associated with historical occurrences. These estimates are projections based on the probability or likelihood of generating a particular level of retirement income. These figures include a range of the estimated average annual retirement income, showing a low and high value at a 68% confidence level. This reflects a 68% probability that an investor's estimated annual retirement income will fall within the range shown. Projections are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. No representation is made that an investor will achieve results similar to those shown. Actual retirement income could be higher or lower based upon a number of factors and circumstances not addressed herein.

Once the investor’s low, average and high annual retirement income estimates associated with the applicable BlackRock Model Portfolio allocation are calculated, the investor’s Core Income Payment (the initial guaranteed retirement income with 2% COLA that a selected amount allocated to a Lincoln Core IncomeSM variable annuity would provide) and additional anticipated annual retirement income from other sources are then added to each estimate. Calculation of the Core Income Payment is performed by BlackRock using product specifications provided by Lincoln and does not use statistical modeling techniques. BlackRock is not responsible for the accuracy of Lincoln’s product specifications. More information regarding Lincoln Core IncomeSM product details, including the minimum purchase payment, additional purchase payment limit and guaranteed lifetime income feature, can be obtained in the applicable prospectuses for the variable annuity and its underlying investment options. Investors should consult with their advisors on whether the amount allocated to the variable annuity is suitable for them, and if they included the right amount of retirement income from other sources.

Long-term Capital Market Assumptions (28 June 2019):

Long-term capital market assumptions refer to BlackRock's return, risk and correlation expectations for each asset class. (Correlation measures how asset classes move in relation to each other). These assumptions are based on historical asset class returns (as reflected by certain indices), proprietary models, BlackRock's subjective assessment of the current market environment and forecasts as to the likelihood of future events.



Assumed Return

Assumed Risk






MSCI World ex USA Index (unhedged)




Bloomberg Barclays U.S. Government Index




Bloomberg Barclays Global Aggregate Treasury Index ex U.S. (unhedged)




Bloomberg Barclays U.S. Credit Index



Assumed return is calculated as the expected amount of return generated by the corresponding level of risk for each asset class, plus a short term U.S. Treasury bill investment return. U.S. and non-U.S. equity return is estimated based on the historic correlation between equity valuations and long term returns. U.S. credit return is estimated based on the additional yield that has historically been generated over equivalent maturity treasuries provided by corporate bonds, net of potential losses stemming from worsening credit quality. U.S. and non-U.S. rate return is calculated based on the relative yields of long term government bonds in those markets.

BlackRock typically reviews the assumptions quarterly. Long-term capital markets assumptions are subject to high levels of uncertainty regarding future economic and market factors that may affect actual future performance. There is no guarantee that the capital market assumptions will be achieved, and actual returns could be significantly higher or lower than those shown. Capital market assumptions should not be relied on as a forecast or prediction of future events, and they should not be construed as guarantees as to returns that may be realized in the future from any investment or asset class described herein. Ultimately, the value of these assumptions is not in their accuracy as estimates of future returns, but in their ability to capture relevant relationships and changes in those relationships as a function of economic and market influences.

Because of the inherent limitations associated with the use of illustrative asset allocations based on capital markets assumptions, investors should not rely exclusively on the asset allocations or funds shown in the tool when making an investment decision. The illustrative asset allocations cannot account for the impact that economic, market, and other factors may have on an actual investment. Unlike actual investments, the asset allocations shown in the tool do not reflect actual trading, liquidity constraints, fees, expenses, taxes and other factors that could impact an investor’s realized future returns.

Past performance is no guarantee of future results.

Asset Classes/Risk Premiums:

Risk premium is defined as the return above a very low risk investment in short term U.S. Treasury Notes.

U.S. Equities are based on the MSCI USA Index, which is designed to measure returns and risk associated with U.S. equity related investments.

Non-U.S. Equities are based on the MSCI World ex USA Index, which is designed to measure returns and risk associated with non-U.S. equity related investments.

U.S. Rates are based on the Bloomberg Barclays U.S. Government Index, which is designed to measure returns and risk associated with U.S. sovereign bond related investments.

Non-U.S. Rates are based on the Bloomberg Barclays Global Aggregate Treasury Index ex U.S, which is designed to measure returns and risk associated with non-U.S. sovereign bond related investments.

U.S. Credit is based on the Bloomberg Barclays U.S Credit Index, which is designed to measure returns and risk associated with U.S. credit related investments.

Indexes are unmanaged and one cannot invest directly in an index.

Asset allocation and diversification strategies do not guarantee a profit and may not protect against loss. The two main risks related to fixed-income investing are interest rate risk and credit risk. Typically, when interest rates rise, there is a corresponding decline in bond values. Credit risk refers to the possibility that the bond issuer will not be able to make principal and interest payments. Non-investment-grade debt securities (high-yield/junk bonds) may be subject to greater market fluctuations, risk of default or loss of income and principal than higher-rated securities. An investment in any fund identified in the tool is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency and their return and yield will fluctuate with market conditions. International investing involves risks, including risks related to foreign currency, limited liquidity, less government regulation and the possibility of substantial volatility due to adverse political, economic or other developments. These risks often are heightened for investments in emerging/developing markets or in concentrations of single countries. Investing in small-cap companies may entail greater risk than large-cap companies, due to shorter operating histories, less seasoned management or lower trading volumes.