Blackrock Survey Says Americans Looking Beyond Savings for Retirement

Requests size and scope of asset growth over recent years.

Speaker1

Nick Nefouse

Assets under management grew from $150B to over $700B over 10 years, driven by defined contribution trend, auto-enrollment, and company matches flowing into target-date funds like LifePath.

This is how Americans are going to retire; demand is higher; corporates engaging more.

Questions whether the asset mix for those nearing retirement has changed given equities' strong performance vs bonds over 12-15 years.

Historically, target-date funds automatically shift mix; but recent equity outperformance penalized bond-heavy allocations.

Speaker3

Nick Nefouse

The industry is moving toward 'personal pensions' that embed guaranteed income into portfolios, going beyond traditional stock/bond mixes for retirees.

Young investors still have 99% equities; but near-retirees need more—private markets, active management, guaranteed income (e.g., LifePath Paycheck). DB plans had wider asset sources; we need to replicate that in DC plans.

Asks how BlackRock factors in tail risks like GFC or COVID when nothing is guaranteed.

Markets can come undone; financial systems nearly collapsed in 2008; COVID shutdown was unprecedented.

Speaker1

Nick Nefouse

Diversification is key, but bonds have evolved—they no longer provide the same portfolio protection against equity volatility as they did from the 1980s onward.

Bonds did well during GFC/COVID, but in the last couple of years they haven't offered the same offset. This is driving demand for alternatives, including liquid alternatives.

Raises concern that alternatives in retirement portfolios are meant for sophisticated investors and the best options may not be available.

Some critics say it's a terrible idea; there's worry about private credit challenges and that only lower-quality alternatives end up as options.

Speaker3

Nick Nefouse

The issue is structuring, not access. BlackRock, as professional investors with Aladdin tools, can build appropriate structures. DB plans run ~20% private markets; target-date funds should have similar access, but must manage to net-of-fee benchmarks.

We can't just bolt on private markets; it must be about outcomes. The goal is certainty in retirement.

Asks about the gap between high retirement confidence and actual readiness.

Speaker1

Nick Nefouse

Confidence is high partly because markets are rising, directly lifting account balances. But there's a gap between confidence and having enough money for certainty in retirement.

Target-date funds rebalance professionally; we encourage saving more and making money work harder through alternatives and guaranteed income.

Asks how healthcare costs factor into retirement planning.

Healthcare can be a nightmare; government coverage exists but may not be sufficient.

Speaker1

Nick Nefouse

The 'retirement window' (ages 55-70) is critical and stressful. Two-thirds of Americans want to work longer but only one-third can, due to health or job loss. Social Security and guaranteed income decisions are key.

We must position people to have enough money; they're looking for certainty.

Asks how active people are in their portfolios during volatility, given expert advice to set and forget.

Speaker3

Nick Nefouse

Data shows people are not very active in target-date funds, which is good—they outperform DIY investors. However, we haven't seen a prolonged drawdown in 16-17 years; the 2000-2002 period (not just 2008) is a concern, with years of sideways markets.

Target-date funds handle diversification, allocation, rebalancing automatically. A prolonged drawdown would test this behavior.

Asks if the current AI era could be similar to the 2000-2002 sideways/down market.

Speaker1

Nick Nefouse

The AI era is very different from the dot-com era. Investing is more diversified today—people own bonds and alternatives, not just tech stocks. The AI story has multiple layers.

I started investing in IPOs in the late 90s; now I teach my sons about target-date funds and Trump accounts. The market is fundamentally different.

Asks how Trump accounts (proposed accounts for children) fit into the retirement picture.

Speaker3

Nick Nefouse

Trump accounts are an access point to rewire the retirement system—saving earlier and compounding longer. More Americans investing in capital markets is beneficial.

Extra time compounding is mathematically powerful.

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