Retirement experts are working through the Retirement Security Project in Washington to develop concepts that would increase annuity ownership within 401k plans.
Concepts include providing 401k participants with the ability to test drive annuities through an "automatic trial income strategy."
In other words, at retirement about half of a person's plan assets would be placed in a trial income plan that would pay out a monthly annuity income for two years. Participants would then have the ability to opt-out at the end of that period. The idea is that the automatic enrollment would introduce people to the idea of lifetime income through an annuity program.
Another 401k-related idea involves the gradual accumulation of a deferred annuity. 401k plan participants would make incremental purchases of a deferred annuity over many years so that they are not presented at retirement with the daunting decision of how best to create income with their accumulated assets.
Employers could provide matching contributions for the in-plan annuity purchases. The annuity option may also be embedded within certain mutual funds offerings within the 401k plan.
Source: Investment News
- Log in to post comments
