The 7 Essential Habits of Highly Confident Retirees

LESSONS LEARNED FROM

BlackRock’s 2012 Retirement Survey

How Your Retired ColleaguesGot the Most Out of Their 401(k)

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 identified7 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.

%

Enroll EarlyTime 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

77of 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

%

Max Your Savings RateRethink 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.

73of 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

%

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.

90of 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

1,600,000

1,800,000

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

%

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!

87of 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

%

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?

83of 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

%

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.

79of 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

%

Estimate Retirement IncomeWhat 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!

84of 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

4 Steps to Build a Better Retirement Future

It’s in your hands! You

can take action today to

increase your savings –

in your employer plan as

well as on your own –

and create a better

retirement for tomorrow.Pay your future self first. Speak to your employer about making your savings automatic.

Get Started Today!Visit blackrock.com/retirement

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STARTING NOW

Hike Mt. Retirement for handy retirement savings checklists designed to help you take action no matter where you are on your journey towards retirement.

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This material is provided as an educational tool and should not be considered investment advice. BlackRock cannot be held responsible for any direct or incidental loss resulting from applying any of the information provided in this publication or from any other source mentioned. BlackRock is not engaged in rendering any legal, tax or accounting advice. Please consult with a qualified professional for this type of advice.

©2013 BlackRock, Inc. All Rights Reserved. BLACKROCK, is a registered trademark of BlackRock, Inc. or its subsidiariesin the United States and elsewhere. All other trademarks are those of their respective owners. USR-1482

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.