Nearly two-thirds of American workers fear outliving their retirement savings¹

LifePath Paycheck can help alleviate that concern for half a million people with more to follow

Solution is part of BlackRock’s efforts to help people manage spending throughout increasingly longer retirements

BlackRock (NYSE: BLK) announced today that its retirement income solution, LifePath Paycheck™, is now available in defined contribution plans.

The LifePath Paycheck solution takes a new approach to retirement income by providing access to guaranteed income through a target date fund, an investment strategy that automatically adjusts to a targeted retirement year. Plan participants will have the option to access the guaranteed income as early as age 59 ½ by purchasing annuity contracts issued by Equitable (NYSE: EQH) and Brighthouse Financial (NASDAQ: BHF).

To help educate plan participants, BlackRock developed MyLifePath™, a digital experience that shows how today's contributions can translate into income in retirement.

Avangrid (NYSE: AGR), Adventist HealthCare Retirement Plans, and Tennessee Valley Authority Retirement System will be among the first to implement the strategy as the default investment option for their employees’ defined contribution plan, with additional plan sponsors to follow in the coming months. To date, 14 plan sponsors, with plans totaling $27 billion in target date assets, are planning to make LifePath Paycheck available to 500,000 employees, with several other large plan sponsors expressing interest.

Larry Fink, Chairman and CEO of BlackRock, said, “We believe LifePath Paycheck will one day be the default retirement investment strategy, providing access to a predictable, paycheck-like income stream that can help improve the quality of life for millions of Americans in retirement.”

Anne Ackerley, Head of Retirement at BlackRock, added, “A top concern among American workers is the fear of running out of money during retirement. And yet the industry has focused on helping people understand they need to save – but not how to manage spending in retirement, even as companies have shifted from defined benefit to defined contribution plans. With this solution, we’re rethinking retirement. And part of that was working across the industry to build something new.”

Access to an option for guaranteed income could help alleviate the stress many Americans currently face about the uncertainty of outliving their savings. According to early findings from BlackRock’s ninth annual Read on Retirement™ survey,¹ nearly two-thirds (60%) of those surveyed² worry they’ll outlive their retirement savings and 99% say having guaranteed retirement income would help ease that concern. Beyond financial benefits, 93% ¹ say having more certainty around retirement income would help their mental health today.

Retirees agree – 94% surveyed also believe employers should provide their employees with a retirement income solution through their workplace plan. Additionally, the survey found that 99% of plan sponsors feel responsible for helping plan participants generate and/or manage their income in retirement.

Paul Visconti, Senior Director of Total Health and Retirement Programs at Avangrid, a sustainable energy company that has implemented LifePath Paycheck, said, “LifePath Paycheck is a game changer in our effort to attract, retain, and empower talent. By taking some of the guesswork out of financial planning, we’re enabling our employees to focus on what they do best – accelerating transformation for our customers and communities by pioneering a brighter clean energy future.”

Rob Roy, Member of the Investment Committee for Adventist HealthCare Retirement Plans, a multiple-employer retirement program for hundreds of hospitals, said, “After a lifetime of hard work caring for others, we believe our employees deserve to feel more financially secure in retirement. As we evaluated the landscape of different lifetime retirement income offerings, LifePath Paycheck decisively led the pack in how it takes the complexity out of a process that has confused employers and individuals, alike, for decades.”

Nick Nefouse, CFA, Global Head of LifePath at BlackRock, noted, “BlackRock pioneered the first target date fund over thirty years ago – and LifePath Paycheck represents the next phase of BlackRock’s leadership in retirement. We continue to develop innovative solutions for Americans that are affordable, easy to use, and can provide more economic security to retirees.”

Convening the Industry

BlackRock has worked closely with recordkeepers to facilitate the implementation of LifePath Paycheck for their clients. Fidelity Investments and Bank of America (NYSE: BAC) are among the first to enable access to the solution on their record keeping platforms. Other recordkeepers, including Voya Financial, are also planning to make it available.

In addition, BlackRock worked closely with insurers Equitable and Brighthouse Financial on providing the LifePath Paycheck solution’s income stream option.

“Equitable’s mission is to help our clients secure their financial well-being so they can pursue long and fulfilling lives,” said Aaron Sarfatti, Chief Strategy Officer and Head of Institutional Businesses and New Ventures at Equitable. “The addition of secure income through defined contribution plans presents a profound opportunity to expand on the delivery of our mission. We feel privileged to support BlackRock in its LifePath Paycheck solution as it helps the record number of Americans reaching traditional retirement age reduce the risk of outliving their savings.”

Eric Steigerwalt, President and CEO, Brighthouse Financial, said, “Brighthouse Financial is excited to play a role in helping U.S. workers who are seeking ways to access lifetime retirement income. The launch of LifePath Paycheck is an important step toward addressing the retirement challenges that America faces, and we are pleased to work with BlackRock on this solution.”

About BlackRock

BlackRock’s purpose is to help more and more people experience financial well-being. As a fiduciary to our clients and a leading provider of financial technology, we help millions of people build savings that serve them throughout their lives by making investing easier and more affordable. For additional information on BlackRock, please visit www.blackrock.com/corporate

Disclosures

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 subject to change without notice. Reliance upon information in this material is at the sole discretion of the reader. Investing involves risks.

©2024 BlackRock, Inc. or its affiliates. All Rights Reserved. BLACKROCK, LIFEPATH PAYCHECK and MYLIFEPATH are trademarks of BlackRock, Inc., or its affiliates. All other trademarks are those of their respective owners.

Equitable Financial Life Insurance Company (Equitable Financial) (NY, NY) is the issuer of a single premium immediate annuity (SPIA) for the lifetime income asset described herein. PlanConnect, LLC is a separate but affiliated company of Equitable Financial. Equitable Financial is not affiliated with BlackRock or its affiliates. All guarantees provided within annuity products are based on the claims-paying ability of the issuing life insurance company.

Brighthouse Financial fixed individual retirement annuities are issued by Brighthouse Life Insurance Company, Charlotte, NC 28277, and, in New York only, by Brighthouse Life Insurance Company of NY, New York, NY 10017. All guarantees are subject to the financial strength and claims-paying ability of the issuing insurance company. Brighthouse Financial® and its design are registered trademarks of Brighthouse Financial, Inc. and/or its affiliates.

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¹ The 2024 BlackRock Read on Retirement™ survey provides insights from a research study of over 450 large defined contribution plan sponsors, 300 retirement plan advisors, 1,300 workplace retirement plan savers, 1,300 independent savers and 300 retired workplace savers in the United States. The survey is executed by Escalent, an independent research company. All respondents were interviewed using an online survey conducted between January 29 and March 7, 2024.

² Out of 1,300 workplace retirement plan savers surveyed.

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