More and more Americans are facing the prospect of retiring on savings and Social Security, without the reliable pension checks their parents received. At the same time, it is becoming increasingly clear that getting through retirement by living off investments is too difficult and unpredictable for most of us.
This uncomfortable conclusion has been driving the government, employers and particularly insurers to seek out an alternative — something that functions a lot like an old-fashioned defined benefit pension plan.
So far, the likeliest candidate is an annuity within a 401(k) plan. When the U.S. Department of Labor’s Employee Benefits Security Administration and the Treasury Department sponsored a hearing on these lifetime income options, it seemed clear that annuities within 401(k)s were a notion that employers, the government and especially insurance companies were happy to welcome.