Closing the retirement gap

Your employees have a lot to look forward to. Help ensure a retirement income gap isn’t one of them.

Americans are living longer than ever. As a result, many will likely face a gap between the savings they put aside and the income they really want each year in retirement. Help participants close the gap with these short educational videos and resources, designed to help them grasp key investment concepts.

LifePath® target date funds explained

A clear explanation of LifePath Target Date Funds and how they seek to provide participants with a diversified investment that balances between growing their investment and protecting against risk to help them advance toward their retirement goals.

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    There are some challenges in life you may be prepared to take on.
    And there are others where you’d rather trust a professional. 

    The same holds true when investing for retirement. 

    Some people enjoy the challenge of managing their own investments. 

    While others prefer to let professionals pilot their investment strategies. 

    If that’s you, there’s a professionally managed investment option which follows a sophisticated flight plan that adjusts for your time to retirement.

    Known as LifePath Target Date Funds, they seek to provide a diversified investment that balances between growing your investment and protecting against risk to help you advance toward your retirement goals.
    Similar to how a plane’s glide path adjusts as it approaches its destination, the investment allocation changes as you approach retirement. 

    When you’re young and far from retirement, the investment mix is more aggressive to help your investments grow.

    As you approach retirement, the fund automatically shifts to a more conservative investment allocation with the goal of preserving your savings.

    When you arrive at your desired retirement date, the fund shifts to an investment mix designed to help you retain spending power through retirement.
    So if you like the idea of gliding into retirement with the help of professionals managing your investments, LifePath Target Date Funds are available to help you on your journey.

    Visit your retirement plan website to learn more today.

Meet LifePath!

This brief introduction will help participants understand why their employer picked LifePath and why it can be a great foundation for retirement planning.

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    There are some challenges in life you're prepared to take on. And there are others where it makes sense to call in a professional. Sometimes, the difference between success and failure is knowing when to make the call.

    Like when you're managing investments for your retirement savings plan. Smart investing takes knowledge, information and time. You need to know when to take on risk and how to help reduce risk as your career winds down. So consider the LifePath target date funds from BlackRock.

    LifePath funds automatically reduce risk exposure throughout your career. That means you can pick the fund for the year nearest the year you plan to retire and focus on saving, NOT on shifting your investment mix. LifePath Target Date Funds are managed by the professionals at BlackRock, trusted to manage more money than any other firm in the world. You'll get a globally diversified mix of investments. And professional management from the company that created target date funds over 20 years ago. That can leave you free to focus on your career and your family.

    While we focus on helping you get ready to retire.

What is a target date fund?

Show participants how target date funds simplify the challenge of saving for retirement.

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    Why is picking investments in your retirement savings plan so hard? Maybe it’s because your perspective changes overtime.

    When we’re young, we have years ahead of us so we can take more risk as we weather the typical ups and downs of the equity markets. But as we get older, and we can actually imagine ourselves reaching retirement one day, we typically start thinking about reining in the risk to help protect our savings.

    Target date funds seek to do just that. They offer a diversified mix of equities and fixed income that rebalance overtime, no matter where you are on your life’s path.

    From the start of your career until well into your retirement years, target date funds are designed to make retirement investing easier.

Additional TDF related topics include:

What is diversification?

A clear explanation of one of the most important concepts in investing.

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    You've probably heard the expression "Don't put all your eggs in one basket?"

    The problem is that it only tells half the story. You may not only need more than one basket, you may also need more than one kind of egg–at least when it comes to your investments.

    Think of it this way: in the long run, stocks may be a good investment, but the stock market has up years and down years. So do cash and bonds. Very often, when one kind of investment has a down year, others may have up years.

    By putting together a mix of cash, bonds and stocks–and even different kinds of stocks from across the globe–ups and downs may be less extreme, and that helps create a less volatile experience.

    The good news is, you don't have to manage this mix on your own. Target date funds can do it for you. Target date funds use diversification in two ways. First, they give you a mix of investments, including international exposure.

    Then they change that mix as you age, investing heavily in stocks at the beginning of your career but getting more conservative as you get closer to retirement.

    That way no matter where you are on your life's path, you'll have an age appropriate diversified portfolio designed to help grow your retirement savings.

What is a glidepath?

A look under the hood at what drives a target date fund.

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    If you're thinking about investing in a target date fund, you're probably going to hear the word "glidepath." A glidepath is as an investment roadmap that a target date fund uses to take you from the beginning of your career all the way into retirement.

    Along the way, the glidepath maps out the mix of stocks, bonds and other investments that is appropriate for you based on your age. When you're young, retirement is decades away, so it may make sense to be a more aggressive investor. That's why the glidepath maps you into a diversified mix of stocks with only a small allocation to bonds.

    As you get older, the glidepath automatically reduces your stock mix and adds in more conservative investments designed to preserve your hard earned savings. As you arrive at the funds' target date, the glidepath also arrives at an investment mix that's designed to help you on the next part of your retirement journey.

How target date funds help
manage inflation

A quick look at how target date funds manage one of the top retirement worries—inflation.

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    Here's a simple way to think about inflation.

    Inflation means that the dollar you have today will buy less in the future than it does now. That's a big concern if you're putting your dollars away for your retirement.

    The good news is that target date funds are designed to help you keep inflation from chipping away at your hard earned savings. And they do it for you, automatically.

    Early in your career, when you just are starting to put dollars aside for your retirement, target date funds invest in a diversified mix of stocks in seeking to help your portfolio grow faster than inflation.

    Then as you move towards retirement, your target date fund will start to get more conservative and will automatically reduce the percentage of stocks in your portfolio and increase the percentage of bonds.

    The result is a retirement portfolio that's designed to help you grow and preserve
    your nest egg over your long retirement.