Every day, we are all working towards our retirement. But a divide is emerging among workers and how they’re able to prepare. This divergence is one we at BlackRock are passionate about addressing.
The onus of saving for retirement has shifted from employers to individuals, as 401(k)s replace pensions. But because 401(k)s are a workplace benefit, having one isn’t guaranteed.
Workers whose employers offer 401(k)s benefit from the implicit guidance they provide. In many cases, their contributions are automatically routed to a target date fund1 – a time-tested retirement savings solution vetted by their employer – that makes it simple to invest strategically by automatically adjusting for risk over time.
But workers without corporate plan access – typically the self-employed, gig workers, and those at smaller employers – are often on their own to find retirement products, invest, and adjust their portfolio over time. And with 57 million Americans2 lacking access to a workplace plan, this is creating a significant barrier to a secure retirement for a sizable population.
It’s no surprise these independent savers are losing confidence in their retirement preparedness, according to a recent BlackRock survey.3 Some 40% of independent savers told us they feel off-track about their retirement, a 23% increase from the prior year. By contrast, just one-fourth of workplace savers say they lack confidence.
Independent savers told us they need access to simple products and professional advice. The majority expressed explicit interest in professionally managed solutions that automate asset allocation based on age.
We’re listening. And that’s why we have launched iShares® LifePath® Target Date ETFs. It is our hope that these funds will help millions of independent savers prepare for retirement – as well as those looking to complement existing retirement investments.
The funds are a simple, professionally managed solution, with asset allocations that change over time to seek to deliver the right risk at the right time—all in a single ticker. And because they're an ETF, they're affordable and transparent.
At BlackRock, we are committed to helping more and more people experience financial well-being. It has been 30 years since we pioneered target date funds and we’re in our third decade of democratizing market access through our ETF and index investing business.4
We recognize that this is only part of the solution and we commend the industry-wide work that has already been done to get more people access to retirement plans – from state-facilitated retirement savings programs to public policy advances and tech-enabled solutions that help small employers create plans.
Retirement looks different these days for many reasons beyond people’s control. We’re dedicated to doing more to help millions of savers, like you, an easy way to invest for retirement because choosing where and how to invest is within your control.
We are proud to offer products to more people who need them, and we promise to keep innovating to help you retire on your terms.
