Retirement Income Cost

What changed for
retirement income?

Jul 30, 2015

What changed

  • The estimated cost of future retirement income eased for workers in their 50s and early 60s in the second quarter.
  • As long-term interest rates stabilized, retirement income prospects improved. Pre-retirees got an additional boost from stock-market performance.
  • Retirement income estimates are sensitive to rate fluctuations, so investors should check them periodically so they have time to make adjustments designed to help them stay on track with their goals.

Retirement spending power gets a boost

This quarter saw the first real improvement in retirement prospects since 2013, when BlackRock started tracking the cost of retirement income with the CoRI Retirement Indexes ("CoRI Indexes"). These indexes are designed to help pre-retirees estimate how much annual retirement income their savings could provide each year, starting at age 65. Since June 30, 2014, pre-retirees with savings in both 401(k) plans and individual retirement accounts have seen healthy growth, according to the Employee Benefit Research Institute, and estimated lifetime income from those savings rose as well.

The outlook, however, is mixed. If interest rates stay flat, or even rise, retirees could find it easier to fund their incomes. But market volatility also could continue amid fallout from the situation in Greece and bear market in China.


Chip Castille
Chief Retirement Strategist, BlackRock
Chip Castille, Managing Director, is BlackRock's Chief Retirement Strategist heading the Global Retirement Strategy Group. He is responsible for managing global ...