BlackRock has announced an upcoming change to its target-date funds that will increase the risk for mid- to late-career investors by raising stock exposure, effective in June. This shift comes in response to trends indicating that Americans are living longer and earning income later in life, often without adequate retirement savings due to rising healthcare costs and inflation. Target-date funds, which are mainly used by 401(k) participants who prefer a hands-off investment approach, will see higher equity allocations begin 30 years before retirement, potentially resulting in increased retirement wealth. Given that about 60% of 401(k) plan participants currently invest in these funds, BlackRock emphasizes the need for investors to align their risk tolerance with these changes.
BlackRock increases equity exposure in target-date funds for mid- to late-career investors starting June
