As the economic fallout from COVID-19 threatens peoples’ livelihoods and erodes their short-term savings, it follows that their long-term financial security is also at-risk. What does it all mean for retirement savings and what steps can we take to build a more resilient system?
I like a quick fix as much as the next person. One-pot meals? Sounds great. 10-minute workouts? Sign me up.
But when it comes to building resilient retirement savings… there’s no silver bullet.
In part, that’s because we face a number of challenges all at once. Lack of access to workplace retirement plans, low saving rates, gaps in participation and employment, withdrawals to meet more pressing needs – all these undermine the ability of hardworking people to retire with dignity.
Now combine that with the economic fallout from COVID-19, and you’ve got the makings of a major crisis.
The good news? There are things we can do to improve retirement security.
That’s exactly what my group focuses on at BlackRock. We’re developing innovative solutions to address the most pressing retirement challenges. One of the toughest challenges has been to replace the security of the traditional pension: the need for guaranteed income. Not having enough money for retirement was already a primary financial concern for most Americans – one that will likely be exacerbated by the current crisis. We believe employers will increasingly recognize that there’s an urgent need for new retirement solutions that provide steady, reliable sources of income for their employees – a paycheck in retirement.
That’s precisely the kind of innovation we’re working toward at BlackRock – and we’re bringing together expertise from across the retirement ecosystem to do it. Drawing on cutting-edge product design, behavioral finance and technology, we are building solutions to confront the accelerating retirement crisis in the United States. We are grateful to our partners for their participation in this journey.