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  • Writer's pictureWiseWallet

Guaranteed Income for Life: How BlackRock's LifePath Paycheck Changes the Retirement Game

In our previous blog posts we explore extensively different ways to create retirement income streams. This includes annuities (annuity basics, fixed annuities, variable annuities, indexed annuities, and how to choose the right annuity), bonds (essential guide, bond funds/ETFs, FBND, and PIMIX), and dividend investments (dividend income funds and SCHD). Today we will introduce a new way to generate retirement income from your employer-sponsored retirement plans.


BlackRock's LifePath Paycheck is a pioneering retirement income solution embedded within target date funds, aimed at offering participants both growth potential and income stability. Initially, during the working years, the focus is heavily on growth, with investments primarily in stocks. This strategy transitions from a growth-focused allocation early on to a conservative mix as retirement nears. As participants reach retirement age, specifically from 59½ onwards, they have an option to convert about 30% of their investment into annuities, securing a paycheck for life. Note that the remaining investments can stay in a balanced target date product, which continues to provide potential growth and daily liquidity during retirement. This dual approach — growth/balanced investments coupled with the option to purchase annuities — is designed to address the fear of outliving one's savings, offering a stable and predictable income stream alongside continued investment growth.

So What?

Below is the list of the features that make LifePath Paycheck a comprehensive and attractive solution for retirement planning.

  • Guaranteed Income for Life: Provides an option for retirees to purchase annuities that ensure a steady income throughout retirement, addressing the risk of outliving savings.

  • Integration into Target Date Funds: Combines the traditional growth-focused investment strategy with the security of annuities, providing a smooth transition as the participant nears retirement.

  • Cost Efficiency: LifePath Paycheck funds are designed with cost efficiency in mind, starting with an exceptionally low annual expense ratio of 0.1%. This fee only slightly increases to 0.16% once annuity contracts are integrated. This pricing structure significantly undercuts the typical costs associated with traditional annuities, which often include commissions, loads, distribution fees, and surrender charges, making it an attractive option for cost-conscious investors.

  • Flexibility and Control: Offers participants daily liquidity and the ability to customize their retirement income according to personal needs and situations.

  • Simplified Process: Designed to reduce the complexity and confusion typically associated with buying traditional annuities.

  • Accessibility: Initially available to U.S. employer-sponsored defined contribution plans, with potential future availability to other investor/account types. Considering BlackRock's position as the world's largest asset manager, it's likely that competitors will introduce similar products, potentially broadening the availability of such solutions to a wider range of investors and account types.

  • Digital Support: Features in the MyLifePath platform to aid participants in understanding how contributions can translate into retirement income.

  • Industry Collaboration: Developed in partnership with major insurers and recordkeepers to ensure a seamless integration into existing retirement plans.

Now What?

If you are approaching retirement or planning for long-term financial security, keep an eye on LifePath Paycheck. This brand-new product, which just rolled out on April 24, 2024, isn't widely available yet, but it's worth tracking. Designed to provide a steady income during retirement and act as a supplement to Social Security benefits, it could be a game-changer for those without a traditional pension. As it becomes more accessible, it might be something to consider to ensure your finances are as robust as your retirement plans.

Concluding Remarks

BlackRock's LifePath Paycheck represents a significant innovation in retirement planning, merging the flexibility and growth potential of target date funds with the security of annuities. This solution addresses a vital need for sustainable retirement income, providing a bridge between saving during one’s career and spending during retirement. As the landscape of retirement planning evolves, such integrated solutions may become critical for future retirees navigating the complexities of longevity and financial security.


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