The new retirement is (almost) here
LifePath Paycheck™ launches in...
People work, and plan, and save because they know that life doesn’t stop in retirement. Yet even with the best preparation, many are still at risk of outliving their savings. Longer lives and economic headwinds have made the path to a secure retirement ever more challenging. And people are looking for help answering the question, how do I make my money last?
Introducing LifePath Paycheck™ funds, the next evolution of Target Date solutions. Providing participants with the option to purchase lifetime income from insurance companies selected by BlackRock, complete with an accompanying digital experience.
Like a traditional target date fund, LifePath Paycheck™ becomes more conservative over time, but it doesn’t stop at just stocks and bonds. It starts allocating to a new asset class called “lifetime income” beginning in the year a participant turns age 55 – which, at retirement, can then be used to purchase the annuities from the selected insurers.
That means, in retirement, participants receive a paycheck they can count on every month, every year, for life.
And with the MyLifePath™ digital experience, participants get a clear picture of how today’s contributions can translate to tomorrow’s retirement income, shifting mindsets and encouraging positive savings behaviors to help participants reach their retirement goals.
Managed by BlackRock, LifePath Paycheck™ funds and the MyLifePath™ digital experience.
Driving towards a simpler, more secure path to retirement by providing participants with the option to purchase a lifetime income stream so that you can retire from work, but not a paycheck.
Coming soon to a 401(k) near you
Workers are looking for help answering the question, how much of my nest egg can I spend in retirement… and not run out?
We’re launching a solution. LifePath Paycheck™ combines the simplicity of a target date strategy with the increased certainty of an annuity from insurers selected by BlackRock to offer participants a paycheck for life.
Why retirement income?
#1
Because we’re living longer – and that should be a good thing. In the 20th century, the average American lifespan grew by about 30 years.¹
Life expectancy has grown from 47 in 1900 to 79 in 2023.
#2
Because outliving savings is Americans’ number one financial fear - and employers want to help.
Just 21% of people believe they will have enough money to last through retirement;2 and 98% of plan sponsors feel responsible to fix that.3
#3
Because having guaranteed retirement income can help retirees’ wallets – and minds.
People can get a 22% average increase in potential retirement spending from a target date strategy with an embedded income solution;4 and 89% of workplace savers say having access to such a solution would boost their well-being.5
For illustrative purposes only.
OUR PUBLICATIONS
Insights for better outcomes
LASTEST RESEARCH
When nest eggs need a safety net
Who benefits from guaranteed lifetime income – and how?
22%. That is the average increase in potential retirement spending that individual savers in defined contribution plan can achieve when they embed guaranteed retirement income solutions into a target date fund. For lower-income workers, it’s a 25% increase.
Women live longer. Can they afford it?
A look at gender, life expectancy, and the need for retirement income
Living longer should be a good thing. And it can be with the right tools – for both getting to and through retirement. Women may face different challenges to retirement saving, but there are levers employers can pull to ensure women feel secure in knowing that when work stops, financial security doesn’t have to.
The wellness perk companies should consider
Hint: It’s not kombucha
It may be easy to imagine the financial well-being that guaranteed retirement income can bring in the future. But knowing you’ll have that spending money in the future could offer a serotonin boost now.
Our principles of decumulation
A framework for spending down assets in retirement
Financial advice often focuses on boosting personal savings rates and maximizing return on investment during a worker’s accumulation years. Equally important, however, is the decumulation process, when people spend those savings in the form of income.
How to optimize retirement income
Joint research with the Bipartisan Policy Center
Leveraging BlackRock’s proprietary lifecycle model, our analysis demonstrates how taking a holistic approach to retirement income benefits savers. In particular, a few steps can potentially generate more retirement income and decrease risk.
Simply better prepared. For life.™
Introducing LifePath Paycheck™: the next generation of target date solutions that include an option to purchase a lifetime income stream from insurers selected by BlackRock. In other words, participants can get a paycheck for life.
Here’s how it works:
LifePath Paycheck is focused on growth when participants are young and is primarily invested in equity and equity-like assets.
This breaks down as 99% Equity and 1% Fixed Income.
Starting at age 55, LifePath Paycheck begins allocating to a new asset class called “lifetime income,” which grows over time.6
This breaks down as 52% Equity, 9% Inflation, 24% Fixed Income and 15% Lifetime Income.6
Beginning at age 59 ½, participants can:
Get a paycheck for life by opting to purchase a lifetime income stream for retirement – payable by insurers selected by BlackRock.
The remaining retirement plan savings can either be invested in a target date solution designed to complement the lifetime income stream,7 in another retirement plan investment option, or redeemed for cash.
This breaks down as 37% Equity, 9% Inflation, 24% Fixed Income and 30% Lifetime Income.
Disclaimer
For illustrative purposes only and subject to change.
A clear picture on demand
The MyLifePath™ platform is a digital experience that is accessible through an eligible retirement plan’s recordkeeper. MyLifePath provides information about LifePath Paycheck and provides a means of facilitating an eligible participant’s annuity purchase option with the selected insurers.
