Planning for retirement can be a stressful endeavor. You must figure out how much money you will need saved in order to reach your retirement goals. Additionally, you need to choose a retirement strategy that will minimize your risk while still offering strong income potential. With so many investment options it can be difficult to determine how to balance your retirement portfolio. (For more, see: Retirement Planning: How Much Will I Need? ).

What follows is a look at BlackRock Inc.’s (BLK ) CoRI Funds, which are designed for those 55-64 years old.

CoRI Fund Basics

The CoRI lineup consists of five bond funds with different maturity dates. They are the CoRI 2015 Fund (BCVAX ), CoRI 2017 Fund (BCWIX ), CoRI 2019 Fund (BCXAX ), CoRI 2021 Fund (BCYAX ) and CoRI 2023 Fund (BCZAX ). The funds, which were launched in 2014, invest in U.S. government bonds, treasuries and corporate bonds. (For more, see: BlackRock Lowers Fees on Bond Funds ).

CoRI is powered by a set of BlackRock indexes. They track the estimated amount you need today in order to get $1 of annual income in the future. There are four steps to investing in a CoRI fund. The first step is to use Blackrock’s Find Your Number tool. This helps estimate how much income your savings are expected to generate every year from the age of 65 and beyond. Your number is based on a formula which is the current retirement savings percentage of your retirement year’s index level. Your retirement year’s index level is based on the estimated cost of $1 of inflation-adjusted lifetime income beginning at age 65.

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For example, if you’re 59 years old, CoRI estimates that you will need $18.22 saved today to generate each dollar of annual retirement income starting at age 65. Your CoRI index level would be $18.22. If you’re 55 years old, CoRI estimates that you will need $15.83 saved today to generate each dollar of annual retirement income starting at age 65. Your CoRI index level would be $15.83.

The second step is to choose a fund based on the year you retire, while the third step is to track your index as the cost of inflation changes over time.

The fourth step is to choose an income plan once you reach retirement. You have the option of remaining invested in the fund for up to 10 years, which is when the fund reaches its maturity date. Otherwise, you can buy an annuity or devise an income plan with a financial advisor. (For more, see: An Overview of Annuities ).

Fund Stucture

BlackRock’s CoRI Funds are based on five factors: starting level, inflation. interest rates. risk and life expectancy. The CoRI retirement index level starts at $1 per year beginning at the age of 65. The index level begins at 51, in the event you live to 115.

Since the cost of living usually increases, you need to preserve your purchasing power. The index level prices in a cost of living adjustment beginning at age 65. (For more, see: Tips & Costs to Consider When Retiring in the U.S. ).

Interest rate changes will cause daily fluctuations in the CoRI index level. Market information related to what insurers are charging to manage risk also impacts the index level.

It is important to point out that that unlike an annuity. there is no guarantee of income. BlackRock’s CoRI Funds act more like an investment. This means higher risk but also the potential for higher rewards. The biggest threat is unexpected inflation, but that’s not expected to take place for many years. In addition to the likelihood of not having to worry about runaway inflation for many years, you can also move in and out of CoRI Funds without a penalty — unlike an annuity. (For more, see: Tips For Managing Inflation In Retirement ).

Mortality calculations are similar to the ones used by social security, pension plans and insurance companies.

Long Term Capital Assumptions

Below is a table that includes a comparison of risk/return expectations. This information is imperative for anyone planning for retirement as it will help you determine your best option(s).