The Retirement Window is stressful, with 60% of BlackRock’s Read on Retirement® Survey respondents worrying about outliving their savings, and 80% saying it impacts their mental health. As savers approach retirement, their circumstances change, and their retirement solution should evolve with them.
To effectively address the uncertainties of the Retirement Window, individuals must manage interconnected risks across four critical areas: employment, longevity, health, and financial preparedness.
The Retirement Window is when the stakes are highest, and proactive management enables individuals to better mitigate inherent risks. This uncertainty can be solved by longevity hedging, multiple sources of income, flexibility in spending, and a total portfolio approach.
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Arley Reyes, Senior Retirement Strategist, BlackRock
Retirement is not a fixed point in time like a birthday or graduation. It’s a stretch of time from ages 55 to 70 that requires careful planning – because you’re not exactly sure when it’s going to happen. We call it the “retirement window”. And we’ve identified four key risks to focus on to help manage uncertainties in retirement
Navigating the Retirement Window
First, employment. Most of us probably hope to retire on our own terms. But in reality, for many, retirement is something that happens to them, not for them. About 40% of workers leave their jobs earlier than they expect, which can have a significant impact on their lifetime earnings and savings. Source: Employee Benefit Research Institute, 2024 Retirement Confidence Survey
Second, longevity. None of us know how long we’re going to live – and that means there’s risk of outliving your savings.
Third – Health. Aside from personal health expenses, which can double from 65 to 85, retirees may also find themselves caring for aging parents, ailing spouses or even grandchildren. Source: RBC Wealth Management & Bureau of Labor Statistics. (n.d.). The real cost of health care in retirement - RBC Wealth Management These added responsibilities can intensify emotional and financial pressures at a time when resources might already be stretched thin.
Fourth: financial preparedness. From deciding when to take social security to diversifying your sources of income in retirement, there are a lot of small and large decisions that can have a ripple effect through your retirement.
The bottom line is: while there are a million paths to retirement, most people prefer the path with most certainty. The good news is, a little proper planning around these four risks can help you navigate the retirement window with more confidence.
This material is intended for information purposes only, and does not constitute investment advice, a recommendation or an offer or solicitation to purchase or sell any securities, funds or strategies to any person in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. The opinions expressed are as of March 2025 and are subject to change without notice. Reliance upon information in this material is at the sole discretion of the reader. Investing involves risks.
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BlackRock Retirement Strategist Arley Reyes looks at four areas retirement savers can focus on to help manage uncertainties in retirement.
For most savers, the primary objective of their financial plan is to ensure they have sufficient funds to meet their spending needs during retirement. Despite this intention, taking action can be daunting due to the uncertainty surrounding a new phase of life and a lack of information around critical decisions that must be made.
These are some reasons why, when it comes to retirement, many Americans are unprepared. A Federal Reserve study found that 25% of working Americans have no retirement savings, and half of those with accounts had savings less than $87,000.1 The same study found that half of Americans aged 55-70 with accounts have savings of less than $200,000. These statistics, as well as the self-reliance stemming from the shift from defined benefit to defined contribution plans, highlight the need for improving retirement readiness.2
In order to improve retirement outcomes, at BlackRock, we believe a lifecycle investment solution should integrate real-world data across three primary risks: income risk, longevity risk, and markets risk. These primary and related risks are not stagnant and vary in importance and magnitude over time. What our latest research has found is that these risks are magnified during the period in which individuals approach retirement and during the early years of retirement. This period between the ages of 55-70 where uncertainty is heightened, we refer to as the “Retirement Window.” Across this short period of time, retirement outcomes are either influenced by variables beyond our control, or if controllable, shaped by a few pivotal decisions that bear long-term consequences.
In this new paper, we highlight areas of uncertainty during the Retirement Window and examples of critical decisions that most seem to miss or misunderstand.
The Retirement Window can be a stressful period, and the data proves it. BlackRock’s Read on Retirement® Survey found that 60% of respondents worry that they’ll outlive their retirement savings, and 80% say the worrying has impacted their mental health.3 We are here to help. What is clear to us is that while there are a million paths to retirement, most individuals prefer the path with most certainty. We believe that as retirement savers approach retirement, their circumstances change, and their retirement solution should evolve with them.
That’s why LifePath is not just an exercise in maximizing returns or having a sole focus on market risk. It’s about anticipating and mitigating the various risks that come with each life stage and delivering choices that allow savers to increase certainty around their personal retirement outcomes.
Our latest report identifies the major trends shaping retirement and areas where we can convert challenges into opportunity given cracks in the system.
BlackRock modeling reveals that guaranteed lifetime income enhances savings for all workers, ensuring retirees don't outlive their funds.
1 2022 Survey of Consumer Finances (SCF), Board of Governors of the Federal Reserve System.
2 BlackRock’s Read on Retirement Survey, 2024.
3 BlackRock’s Read on Retirement Survey, 2024.
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