Watch this video to learn participant sentiment around lifetime income.
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PARTICIPANT SENTIMENT RESEARCH
Retirement savings to retirement income: 401(k) participant perspectives
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401(k) plans are the dominant form of retirement savings in the private sector with 79 million active participants and $6.8 trillion in assets1. While these plans provide a means to accumulate retirement savings, the typical 401(k) is not designed to disburse savings as consistent monthly income guaranteed for a retiree’s lifetime.
Nuveen, in collaboration with the TIAA Institute, fielded a survey of more than 2,100 401(k) participants to gain their perspectives on converting retirement savings to retirement income, including the value of in-plan annuities.
Positive sentiments about in-plan annuities are more common among 401(k) participants who expect their plan and any other retirement savings to be a major source of income in retirement compared with peers who expect this to be a minor income source. They more often view the inclusion of an in-plan fixed annuity as very valuable, and they tend to have greater interest in using a fixed annuity for both saving money for retirement and withdrawing money in retirement. This is noteworthy because as the 401(k) system moves into its fifth decade, an ever-increasing number of individuals will enter retirement after spending significant portions of their work life participating in these plans.
[Interested in learning more? Access the full report.]
Participants have favorable views of lifetime income and in-plan annuities
Dive deeper into 3 key findings
In-plan, fixed annuities are in demand
In-plan, fixed annuities are in demand
Financial security in retirement is a shared responsibility
Financial security in retirement is a shared responsibility
Participants are uncertain how to convert 401(k) savings to income
Participants are uncertain how to convert 401(k) savings to income
Learn how advice can help 401(k) participants take control.
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1 Employee Benefits Security Administration (EBSA). (2024). Private pension plan bulletin: Abstract of 2022 Form 5500 annual reports. U.S. Department of Labor.
Annuities are designed for retirement or other long-term goals, and offer a variety of income options, including lifetime income.
Any guarantees are backed by the claims-paying ability of the issuing company.
Pension-like income refers to the income received from a guaranteed-interest annuity contract, not income provided by a defined benefit pension plan.
Converting some or all of your savings to income benefits (referred to as “annuitization”) is a permanent decision. Once income benefit payments have begun, you are unable to change to another option.
The views and opinions expressed are for informational and educational purposes only, as of the date of production/writing and may change without notice at any time based on numerous factors, such as market or other conditions, legal and regulatory developments, additional risks and uncertainties and may not come to pass. This material may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections, forecasts, estimates of market returns, and proposed or expected portfolio composition.
Please be advised, this content is restricted to financial professional access only.
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