1. The 7 Essential Habits of
Highly Confident Retirees
LESSONS LEARNED FROM
BlackRock’s 2012
Retirement Survey
How Your Retired Colleagues
Got the Most Out of Their 401(k)
2. Yes, You Can Build
a Better Retirement
BlackRock’s 2012
Retirement Survey
When it comes to building your retirement, you
can't control the markets. But there is one thing
you can always control: your savings habits.
And that's exactly what confident retirees did
throughout their careers. We listened and identified
7 Essential Habits that you can put into practice to
build retirement security.
We asked over 1,000
retirees if they were
confident about their
retirement.
The self-described “Confident
Retirees” share the steps they took
throughout their working careers
that helped build their confidence.
3. %
Enroll Early
Time is on your side.
Yes it is. But only if you
use it. The longer your
tenure in your employer
sponsored plan, the more
likely you are to build up
appropriate savings.
What if it’s too late to start early?
Then start now!
ESSENTIAL HABIT # 1
77
of confident retirees said
they enrolled in a 401(k)
plan early in their careers.
Source: 2012 BlackRock Retirement Survey
Start Saving Today!
WAITING COSTS MORE THAN SAVING
Note: This is for illustrative purposes only and not indicative of any investment. This illustration assumes your ability to
continue to make contributions on a monthly basis. The starting amount is $0 and this illustration assumes you invest $300 per
month continually. Assumes a 7 percent annual return compounded monthly and no distributions. This illustration shows the
amount if you start saving now, vs. your savings amount if you wait 5 years. "The cost of waiting" is meant to show the gap
between those two number or what waiting 5 years could potentially cost. Assumes 7 percent annual return compounded monthly
and no distributions.
Source: BlackRock Investing involves risk including possible loss of principal
4. %
Max Your Savings Rate
Rethink your contribution.
Don’t just stick with
the plan’s automatic
deferral rate. Even
contributing the maximum
match percentage may
not be enough.
Confident retirees focused on the
max! What’s the most the IRS
allows you to contribute? Can’t
do that today? Use automatically
escalating contributions to get
you to that amount.
73
of confident retirees said
they saved the maximum
amount permitted in their
401(k) plan.
Source: 2012 BlackRock Retirement Survey
ESSENTIAL HABIT #2
MEETING THE MATCH IS JUST A START
Note: This is for illustrative purposes only and not indicative of any investment. Assumes 7 percent annual rate of
return; employer match of 50 percent up to 8 percent; $50,000 income per year.
Source: BlackRock
Explore Your Savings Toolkit
5. %
Increase Savings
Whenever You Can
Circumstances change.
We get raises, bonuses,
finish paying off the
house or the car.
Whenever you have a
chance to increase
your savings – do it!
The more you save now, the more
flexibility and choice you'll have later.
90
of confident retirees said
they increased their
savings contribution
whenever they were able.
Source: 2012 BlackRock Retirement Survey
ESSENTIAL HABIT #3
INCREASED SAVINGS vs. FLATLINING SAVINGS
Source: BlackRock
* For illustrative purposes only. This illustration assumes your ability to continue to make consistent contributions annually.
Assumes a 7% annual return compounded annually and no distributions. Assumes a starting salary of $50,000 at age 25 with a
2% annual pay increase. Ending balance expressed is at age 65.
Age 25 Age 35 Age 45 Age 55 Age 65
$
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
Increased Savings Rate (.5% per year)
Flat 3% Contribution
Consider this illustration.
Two 25 year-olds that make $50K per year contribute 3%
annually. If one increases her savings rate by .5% each year
until she reached the maximum she would amass more than
$1.2 million in savings! That's $850K more than her colleague
who stayed at 3%*.
Make Your Savings Automatic
6. %
Get Engaged!
Review your statements.
Talk to your employer –
find out what’s their
current best thinking
about helping you
reach retirement.
See what changes they have made
for new employees and whether
they make sense for you. It’s your
plan and your future!
87
of confident retirees said
they “made the most” of
their 401(k) plan.
Source: 2012 BlackRock Retirement Survey
ESSENTIAL HABIT #4
Source: 2012 BlackRock Retirement Survey
Take One Action Each Week
7. %
Actively Participate:
Review Your Strategy Every Year!
You don’t take a trip to
unknown territory without
checking the map. Ask
yourself “Is this still the
best way to get where
I want to go?”
Look at everything – your employer
plan, outside retirement savings,
your entire investment portfolio.
Can you do more today to
make your future self secure?
83
of confident retirees said
they reviewed their savings
strategy on a regular basis.
Source: 2012 BlackRock Retirement Survey
ESSENTIAL HABIT #5
Click The Questions for More
8. %
Act Your Age!
As a teenager you
wanted a fast car.
When you started a
family, you still wanted
something nice, but
your drag racing days
were over.
It’s the same with your portfolio.
Earlier in your career, take on risk
to maximize returns. As you get
closer to retirement, focus on
keeping what you have. Target
date funds make that transition
for your automatically.
79
of confident retirees said they
changed their investment
mix as they got older.
Source: 2012 BlackRock Retirement Survey
ESSENTIAL HABIT #6
INVESTMENT STRATEGIES FOR ALL OF LIFE’S SEASONS
Note: This is for illustrative purposes only and not indicative of any investment. Assumes your ability to change your
investment as you age. The target date at the end of the name designates an approximate year in which an investor
plans to start withdrawing money. The blend of investments in each portfolio are usually determined by an asset
allocation process that seeks to maximize assets based on an investor’s investment time horizon and tolerance for risk.
Typically, the strategic asset mix in each portfolio systematically rebalances at varying intervals and becomes more
conservative (less equity exposure) overtime as investors move closer to the target date. The principal value of the funds
is not guaranteed at any time including the target date.
Source: BlackRock
Gradually shift away from equities into more
conservative investments as you get older. Consider
target date funds, which do this for you automatically!
Understand Target Date Funds
9. %
Estimate Retirement Income
What percentage of
your final salary will be
replaced by your 401(k)
savings, Social Security
and any other source of
retirement support?
Experts say you’ll
need 70%.
Don’t wait until the day before you
retire to estimate your income!
Get a sense of where you are when
there is still time to course correct!
84
of confident retirees said they
estimated their retirement
income before retiring.
Source: 2012 BlackRock Retirement Survey
ESSENTIAL HABIT #7
SPEND IT THE WAY YOU SAVED IT.
BE SMART ABOUT WITHDRAWAL RATES.
Note: This is for illustrative purposes only and not indicative of any investment. See Appendix for full disclosure text.
Source: BlackRock.
Fund Your Golden Years
11. Estimate Retirement
Income (Disclosure)
APPENDIX
Sources: BlackRock; Informa Investment Solutions. This graphic looks at the effect that the amount withdrawn from a portfolio
has on how long that portfolio may last. A prudent withdrawal rate (3% to 5%, adjusted and revisited annually) can increase the
probability of success. Other factors that may affect the longevity of assets include the investment mix, taxes, expenses related
to investing and the number of years of retirement funding (life expectancy). This is a hypothetical illustration starting at the
beginning of a severe stock market downturn in 1973 to 1974. Beginning withdrawals in a rising market could improve the
longevity of your portfolio. The portfolio is made up of 50% stocks and 50% bonds. Stocks are represented by the S&P 500
Index, which is an unmanaged group of securities and considered to be representative of the stock market in general. Bonds are
represented by the Barclays Capital Government Bond Index, which is an unmanaged index comprised of all publicly issued,
non-convertible debt of the US government, its agencies of quasi-federal corporations and corporate or foreign debt guaranteed
by the US government. Inflation is represented by the Consumer Price Index. This illustration assumes a hypothetical initial
portfolio balance of $1,000,000 as of December 31, 1972, and monthly withdrawals beginning in 1973. Each monthly withdrawal
is adjusted annually for inflation. Each portfolio is rebalanced monthly. All dividends and interest are reinvested. Results will vary
based on selection of other time frames and over time as assumptions change. These figures are for illustrative purposes only
and do not represent any particular investment, nor do they reflect any investment fees or expenses, or taxes. It is not possible to
invest directly in an index. Past performance is no guarantee of future results.
