Yes they do‼️ Saving and investing for retirement is essential, but so is creating a steady income stream after retirement. Many people will struggle creating that income from their accumulated assets … will I run out of money?😥 Where do I invest to cope with inflation and still have sufficient income?
Those of us fortunate to have a pension know the security of a deposit in the bank each month. Trying to figure that out on your own sounds pretty scary to me. Take a look at this article.
As far as we can determine, United Technologies Corp. UTX, -1.32% is the only Fortune 100 U.S. company that defaults new hires into an investment option that includes a lifetime income approach. Starting at age 48, the default begins to move the participant’s assets to the company’s Lifetime Income Strategy (LIS) component. The initial transfer is about 4% of assets, but the proportion gradually increases until age 60, when the participant’s entire 401(k) account balance is allocated to the LIS portfolio.
QUINNSCOMMENTARY 
Just not true for the majority of American workers who have retirement savings. A majority of their “wealth” in retirement comes from home equity and Social Security. So, the need to annuitize becomes a very individualized or household-specific decision. For those who need more inflation-indexed, “guaranteed” retirement income, some have concluded the best option may be to defer commencement of Social Security, and gap fill to SSNRA or age 70 with a portion of modest retirement savings.
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Do you really think the people who accumulate several hundred thousand perhaps more on their 401k are equipped to manage that money over a retirement lifetime and that even a portion of the funds in an annuity would not help them sleep better?
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I think they will sleep better if they don’t end up with buyers remorse from using their savings to buy an increment of retirement income they don’t need at an exorbitant price. I have no problem encouraging workers and retirees to “buy” added retirement income by delaying commencement of Social Security benefits to either SSNRA or age 70 – using their savings to gap fill for income needs prior to SS commencement. Some would argue that is risky given SS funding status, but if SS fails, if funding is not corrected, America’s retirees “won’t make it to the bathroom.”
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I think the idea of gradual purchase of an annuity as one investment vehicle using 401k contributions is a good idea. A couple of companies have started. Taking ones total account and buying an annuity is something different. If I didn’t have a pension I know I wouldn’t sleep as well trying to manage money and investments.
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The only high profile firm doing that is UTC. There is a reason why most plan sponsors have not followed their lead – in part, it is the unique workforce at UTC.
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