Retirement income solutions for the next generation | BlackRock

Larry Fink

This is a revolution. This is a revolution in retirement.

[Title Card]

A paycheck for life coming soon to a 401(k) plan near you

Larry Fink

It was very clear to me…we need to be focusing on helping more and more people understand the journey for financial independence during their retirement.

Anne Ackerley

The number one thing is how big does my nest egg need to be? What does that nest egg – what will it earn in retirement? How much will I be able to spend?

Nick Nefouse

What we’re really trying to find in retirement is this consistent source of income.

Larry Fink

If we could now find a way to recreate a defined benefit plan without encumbering the corporation with a liability and try to provide more certainty as to what does it mean in terms of dollars received. We could change the entire retirement space.

Anne Ackerley

Savers want it. Workers want it. Employers are beginning to think about it, and we are starting to see some employers add a form of guaranteed savings into the 401(k).

Larry Fink

To me, we needed to find something that could provide a tighter range of outcomes… and translate it – not into a lump sum of money – but a monthly payment, like a paycheck.

Nick Nefouse

We’re taking a whole portfolio approach, focusing on the liquid assets, the lifetime income component, and social security. So, we’re going to be able to provide people a better path to understanding what they want their retirement to look like.

Anne Ackerley

What is happening in the 401(k) space is there’s been a lot of innovation and pricing of annuities has come down, you can make them much simpler, and so the concept would be – that within the 401(k) – you’d have the option to choose for some part of your savings to buy an annuity – it might even be embedded in the target date.

Larry Fink

This is revolutionary.

Larry Fink

And I truly believe in 10 years, in 20 years from now, when people wake up, this is going to be the dominant defined contribution structure.

Now available in defined contribution plans

Workers are looking for help answering the question, how much of my nest egg can I spend in retirement… and not run out?

We’ve launched a solution that 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.

OUR PUBLICATIONS

Insights for better outcomes

Latest research

10 years of Read on Retirement®

Discover the trends shaping retirement—and the bold steps needed to close the savings gap.

This year’s survey provides insights into the confidence, concerns and behaviors of workplace savers, plan sponsors and retirees to help build a more secure retirement for everyone.

Unlock a decade of retirement research Unlock a decade of retirement research

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.

Read now Read now

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.

Read now Read now

The five forces shaping retirement today

Converting challenges into opportunities

Our recently released report identifies five major trends that are shaping retirement today and the potential for action – so that more Americans can enjoy the secure retirement they deserve after a lifetime of hard work.

Read now Read now

Six reasons to consider retirement income

What the research reveals for workplace retirement savers

People are living longer. But for the most part, we’re not choosing to put off retirement. From financial security to mental fitness, here are 6 ways guaranteed lifetime income can benefit workers as they enter that next chapter.

Read now Read now

Lights, camera, income…

Check out our latest videos on retirement income – and the impact it can have.

BBL: RG Nest Egg

Social Copy:

Over the past 30 years, the pension has largely slipped away. But the need for guaranteed income hasn’t. Stacey Tovrov, BlackRock’s Head of Investment Strategy for Retirement Solutions, explores 3 benefits of guaranteed retirement income. For a deep dive into the research, read the full paper: https://www.blackrock.com/us/financial-professionals/practice/defined-contribution/news-insight-analysis/who-benefits-from-lifetime-income

Repromotion Social Copy:

Which workplace savers could benefit the most from a guaranteed income solution? BlackRock’s Stacey Tovrov looks at the possible outcomes. For a full breakdown across income levels, read our research: RG hub or above link

Script (1:54 )

Intro: When it comes to retirement planning, saving is only half the battle. Knowing how much of that hard-earned nest egg retirees can spend without running out? That’s the real challenge.

Title: All roads lead to income

While most employers feel responsible for helping their employees figure out how to spend in retirement, only 37% think their plan is up to the task today.

Source: BlackRock, Read on Retirement™, 2023

Enter: guaranteed retirement income.

Here’s how it works: start with a target date fund – which most 401(k) savers already use today – and allocate to stocks, bonds, and inflation hedging assets. Over time, add in a new asset class called lifetime income. In our research, we find an allocation of 30% can provide income certainty when paired with Social Security for most investors.

To figure out who could benefit from an approach like this, we looked at 4 different worker personas based on age, salary, and savings rate.

Source: U.S. Census Data, 2022. BlackRock analysis, 2024. (Refers to the average starting salary at the “starting age” (25, 35, 45, 55).) 11 The ages here were chosen by BlackRock. EBRI, Retirement Confidence Survey, Age Comparisons Among Workers, 2023. These savings rates were chosen by BlackRock and informed by EBRI research.

We then analyzed outcomes across thousands of market scenarios and compared the guaranteed retirement income solution to a traditional target date fund.

Footnote: Value of the modeled deferred annuities uses a proprietary BlackRock annuity pricing model

The result?

More potential spending money in retirees’ pockets. Our model finds a guaranteed retirement income solution can lead to a 22% average uplift across all income levels.

And for lower-income workers, that spending power went even higher - a 25% increase.

Source: BlackRock, 2/29/24 “When nest eggs need a safety net”

The bottom line is: guaranteed retirement solutions can help increase retirement spending across all income levels and provide additional security throughout a saver’s lifetime. Because living longer should be a good thing. And, with lifetime income, it can be.

END

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 January 2024 and are subject to change without notice. Reliance upon information in this material is at the sole discretion of the reader. Investing involves risks. BlackRock does and may seek to do business with companies covered in this video content. As a result, viewers should be aware that the ﬁrm may have a conﬂict of interest that could aﬀect the objectivity of this video.

In the U.S. and Canada, this material is intended for public distribution.

In the UK and Non-European Economic Area (EEA) countries: this is issued by BlackRock Investment Management (UK) Limited, authorised and regulated by the Financial Conduct Authority. Registered office: 12 Throgmorton Avenue, London, EC2N 2DL. Tel: + 44 (0)20 7743 3000. Registered in England and Wales No. 02020394. For your protection telephone calls are usually recorded. Please refer to the Financial Conduct Authority website for a list of authorised activities conducted by BlackRock.

In the European Economic Area (EEA): this is issued by BlackRock (Netherlands) B.V. is authorised and regulated by the Netherlands Authority for the Financial Markets. Registered office Amstelplein 1, 1096 HA, Amsterdam, Tel: 020 – 549 5200, Tel: 31-20-549-5200. Trade Register No. 17068311 For your protection telephone calls are usually recorded.

In Italy, For information on investor rights and how to raise complaints please go to https://www.blackrock.com/corporate/compliance/investor-right available in Italian.

In Switzerland: This document is marketing material.

For investors in South Africa: Please be advised that BlackRock Investment Management (UK) Limited is an authorized financial services provider with the South African Financial Services Board, FSP No. 43288.

In Latin America: this material is for educational purposes only and does not constitute investment advice nor an offer or solicitation to sell or a solicitation of an offer to buy any shares of any Fund (nor shall any such shares be offered or sold to any person) in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities law of that jurisdiction. If any funds are mentioned or inferred to in this material, it is possible that some or all of the funds may not have been registered with the securities regulator of Argentina, Brazil, Chile, Colombia, Mexico, Panama, Peru, Uruguay or any other securities regulator in any Latin American country and thus might not be publicly offered within any such country. The securities regulators of such countries have not confirmed the accuracy of any information contained herein. The provision of investment management and investment advisory services is a regulated activity in Mexico thus is subject to strict rules. For more information on the Investment Advisory Services offered by BlackRock Mexico please refer to the Investment Services Guide available at www.blackrock.com/mx

In Singapore, this is issued by BlackRock (Singapore) Limited (Co. registration no. 200010143N). This advertisement or publication has not been reviewed by the Monetary Authority of Singapore.

In Hong Kong, this material is issued by BlackRock Asset Management North Asia Limited and has not been reviewed by the Securities and Futures Commission of Hong Kong

In Australia, issued by BlackRock Investment Management (Australia) Limited ABN 13 006 165 975, AFSL 230 523 (BIMAL). This material provides general information only and does not take into account your individual objectives, financial situation, needs or circumstances. Refer to BIMAL’s Financial Services Guide on its website for more information. Before making any investment decision, you should assess whether the material is appropriate for you and obtain financial advice tailored to you having regard to your individual objectives, financial situation, needs and circumstances.

Any research in this document has been procured and may have been acted on by BlackRock for its own purpose. The results of such research are being made available only incidentally. The views expressed do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of any company in the BlackRock Group or any part thereof and no assurances are made as to their accuracy.

This document is for information purposes only and does not constitute an offer or invitation to anyone to invest in any BlackRock funds and has not been prepared in connection with any such offer.

© 2024 BlackRock, Inc. or its affiliates. All Rights Reserved. BLACKROCK is a registered trademark of BlackRock, Inc. or its affiliates. All other trademarks are those of their respective owners

BBL: RG Nest Egg

Social Copy:

Over the past 30 years, the pension has largely slipped away. But the need for guaranteed income hasn’t. Stacey Tovrov, BlackRock’s Head of Investment Strategy for Retirement Solutions, explores 3 benefits of guaranteed retirement income. For a deep dive into the research, read the full paper: https://www.blackrock.com/us/financial-professionals/practice/defined-contribution/news-insight-analysis/who-benefits-from-lifetime-income

Repromotion Social Copy:

Which workplace savers could benefit the most from a guaranteed income solution? BlackRock’s Stacey Tovrov looks at the possible outcomes. For a full breakdown across income levels, read our research: RG hub or above link

Script (1:54 )

Intro: When it comes to retirement planning, saving is only half the battle. Knowing how much of that hard-earned nest egg retirees can spend without running out? That’s the real challenge.

Title: All roads lead to income

While most employers feel responsible for helping their employees figure out how to spend in retirement, only 37% think their plan is up to the task today.

Source: BlackRock, Read on Retirement™, 2023

Enter: guaranteed retirement income.

Here’s how it works: start with a target date fund – which most 401(k) savers already use today – and allocate to stocks, bonds, and inflation hedging assets. Over time, add in a new asset class called lifetime income. In our research, we find an allocation of 30% can provide income certainty when paired with Social Security for most investors.

To figure out who could benefit from an approach like this, we looked at 4 different worker personas based on age, salary, and savings rate.

Source: U.S. Census Data, 2022. BlackRock analysis, 2024. (Refers to the average starting salary at the “starting age” (25, 35, 45, 55).) 11 The ages here were chosen by BlackRock. EBRI, Retirement Confidence Survey, Age Comparisons Among Workers, 2023. These savings rates were chosen by BlackRock and informed by EBRI research.

We then analyzed outcomes across thousands of market scenarios and compared the guaranteed retirement income solution to a traditional target date fund.

Footnote: Value of the modeled deferred annuities uses a proprietary BlackRock annuity pricing model

The result?

More potential spending money in retirees’ pockets. Our model finds a guaranteed retirement income solution can lead to a 22% average uplift across all income levels.

And for lower-income workers, that spending power went even higher - a 25% increase.

Source: BlackRock, 2/29/24 “When nest eggs need a safety net”

The bottom line is: guaranteed retirement solutions can help increase retirement spending across all income levels and provide additional security throughout a saver’s lifetime. Because living longer should be a good thing. And, with lifetime income, it can be.

END

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 January 2024 and are subject to change without notice. Reliance upon information in this material is at the sole discretion of the reader. Investing involves risks. BlackRock does and may seek to do business with companies covered in this video content. As a result, viewers should be aware that the ﬁrm may have a conﬂict of interest that could aﬀect the objectivity of this video.

In the U.S. and Canada, this material is intended for public distribution.

In the UK and Non-European Economic Area (EEA) countries: this is issued by BlackRock Investment Management (UK) Limited, authorised and regulated by the Financial Conduct Authority. Registered office: 12 Throgmorton Avenue, London, EC2N 2DL. Tel: + 44 (0)20 7743 3000. Registered in England and Wales No. 02020394. For your protection telephone calls are usually recorded. Please refer to the Financial Conduct Authority website for a list of authorised activities conducted by BlackRock.

In the European Economic Area (EEA): this is issued by BlackRock (Netherlands) B.V. is authorised and regulated by the Netherlands Authority for the Financial Markets. Registered office Amstelplein 1, 1096 HA, Amsterdam, Tel: 020 – 549 5200, Tel: 31-20-549-5200. Trade Register No. 17068311 For your protection telephone calls are usually recorded.

In Italy, For information on investor rights and how to raise complaints please go to https://www.blackrock.com/corporate/compliance/investor-right available in Italian.

In Switzerland: This document is marketing material.

For investors in South Africa: Please be advised that BlackRock Investment Management (UK) Limited is an authorized financial services provider with the South African Financial Services Board, FSP No. 43288.

In Latin America: this material is for educational purposes only and does not constitute investment advice nor an offer or solicitation to sell or a solicitation of an offer to buy any shares of any Fund (nor shall any such shares be offered or sold to any person) in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities law of that jurisdiction. If any funds are mentioned or inferred to in this material, it is possible that some or all of the funds may not have been registered with the securities regulator of Argentina, Brazil, Chile, Colombia, Mexico, Panama, Peru, Uruguay or any other securities regulator in any Latin American country and thus might not be publicly offered within any such country. The securities regulators of such countries have not confirmed the accuracy of any information contained herein. The provision of investment management and investment advisory services is a regulated activity in Mexico thus is subject to strict rules. For more information on the Investment Advisory Services offered by BlackRock Mexico please refer to the Investment Services Guide available at www.blackrock.com/mx

In Singapore, this is issued by BlackRock (Singapore) Limited (Co. registration no. 200010143N). This advertisement or publication has not been reviewed by the Monetary Authority of Singapore.

In Hong Kong, this material is issued by BlackRock Asset Management North Asia Limited and has not been reviewed by the Securities and Futures Commission of Hong Kong

In Australia, issued by BlackRock Investment Management (Australia) Limited ABN 13 006 165 975, AFSL 230 523 (BIMAL). This material provides general information only and does not take into account your individual objectives, financial situation, needs or circumstances. Refer to BIMAL’s Financial Services Guide on its website for more information. Before making any investment decision, you should assess whether the material is appropriate for you and obtain financial advice tailored to you having regard to your individual objectives, financial situation, needs and circumstances.

Any research in this document has been procured and may have been acted on by BlackRock for its own purpose. The results of such research are being made available only incidentally. The views expressed do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of any company in the BlackRock Group or any part thereof and no assurances are made as to their accuracy.

This document is for information purposes only and does not constitute an offer or invitation to anyone to invest in any BlackRock funds and has not been prepared in connection with any such offer.

© 2024 BlackRock, Inc. or its affiliates. All Rights Reserved. BLACKROCK is a registered trademark of BlackRock, Inc. or its affiliates. All other trademarks are those of their respective owners

Even people who have saved diligently often fail to spend – and enjoy – their savings, at least in part due to the uncertainty of how to make savings last. BlackRock developed the LifePath® Spending Tool to help retirees estimate their spending potential year-over-year in retirement.

Visit the tool Visit the tool

Image of laptop