BlackRock Study:

Lifetime Income Can Boost 401(k) Spending Power by 22%

New research from BlackRock underscores the growing role of annuities in turning retirement savings into durable, predictable income. Their latest analysis suggests that embedding guaranteed lifetime income within a 401(k) can significantly increase how much retirees can safely spend each year without raising contribution rates.

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By running 100,000 retirement simulations, BlackRock found that participants who allocate a portion of their savings to a lifetime income solution can, on average, increase sustainable retirement spending power by about 22%. The uplift is even more pronounced for lower‑income savers, who may see around a 25% increase in potential spending.

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The mechanism is straightforward: a slice of the portfolio is converted into guaranteed income, creating a pension‑like payment stream that lasts for life, while the remainder stays invested for growth and liquidity. With a dependable income floor in place, retirees can draw more confidently from their remaining assets instead of underspending out of fear of outliving their savings or facing market volatility at the wrong time.

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The comprehensive study reinforces the idea that retirement outcomes are driven not only by how much participants save, but also by how efficiently those savings are converted into income. Adding a lifetime income component to professionally managed account solutions may be one of the highest‑impact levers available to improve retirement security across income levels.

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At Reliant Investment Management, we see this as part of a broader evolution from “balance thinking” to “paycheck thinking” in retirement planning—shifting the focus from account size at retirement to the reliability and durability of income over a retiree’s lifetime. Many of our clients have already taken advantage of employing a guaranteed lifetime income strategy within their overall retirement portfolio.