Defined contribution retirement plans are commonly criticized for their lack of a guaranteed lifetime income, but with the availability of annuity options for retirees, this concern is largely unfounded. Any retiree with a lump sum of money saved has access to a variety of annuities, even if having these products available internally in one’s employer-provided retirement plan may be preferable. Despite the value of in-plan guaranteed income solutions, signs point to a marked lack of these options in existing defined contribution (DC) plans.
A 2021 Black Rock survey indicates that 96 percent of 225 large 401(k) and 403(b) plan sponsors feel
