{"id":44961,"date":"2026-06-25T10:25:15","date_gmt":"2026-06-25T10:25:15","guid":{"rendered":"https:\/\/financialrush.com\/?p=44961"},"modified":"2026-06-25T10:25:15","modified_gmt":"2026-06-25T10:25:15","slug":"annuity-options-are-growing-in-401ks-but-adoption-remains-limited","status":"publish","type":"post","link":"https:\/\/financialrush.com\/?p=44961","title":{"rendered":"Annuity options are growing in 401(k)s, but adoption remains limited"},"content":{"rendered":"<p> \n<\/p>\n<div id=\"SpecialReportArticle-ArticleBody-6\" data-module=\"ArticleBody\" data-test=\"articleBody-2\" data-analytics=\"SpecialReportArticle-articleBody-6-2\"><span class=\"HighlightShare-hidden\" style=\"top:0;left:0\"\/><\/p>\n<div class=\"InlineImage-imageEmbed\" id=\"ArticleBody-InlineImage-108173459\" data-test=\"InlineImage\">\n<div class=\"InlineImage-wrapper\">\n<div>\n<p>Johner Images | Johner Images Royalty-free | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>Americans are increasingly worried that<a href=\"https:\/\/www.cnbc.com\/2025\/09\/15\/retirement-security-depends-on-planning.html\"> retirement will be less secure<\/a> for them than it was for their parents.<\/p>\n<p>About 76% of workplace savers surveyed said they believe their generation will have <a href=\"https:\/\/www.cnbc.com\/2026\/04\/07\/how-much-money-americans-say-they-need-to-retire-comfortably.html\">less certainty about retirement <\/a>income than previous generations, according to a new <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"SpecialReportArticle-QuoteInBody-3\"><a href=\"https:\/\/www.cnbc.com\/quotes\/BLK\/\">BlackRock<\/a><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"\/><\/button><\/span><\/span><\/span> survey. The share of those concerned has steadily climbed since 2021, when it was 67%.<\/p>\n<p>The survey also found strong interest from respondents in retirement-plan features designed to provide income in retirement. BlackRock, which commissioned the survey, is among the asset managers <a href=\"https:\/\/www.cnbc.com\/2026\/01\/06\/401k-rollover-annuities.html\">that offer annuity products in 401(k)s<\/a>.<\/p>\n<p>The firm, with research company Escalent, polled 1,312 workplace savers between April 15 and May 16.<\/p>\n<\/div>\n<div class=\"group\">\n<div class=\"RelatedContent-relatedContent\" id=\"SpecialReportArticle-RelatedContent-1\">\n<div class=\"RelatedContent-container\">\n<div class=\"RelatedContent-nonCollapsibleContent\">\n<h2 id=\"more-from-women-and-wealth\" class=\"RelatedContent-header\">More from Women and Wealth:<\/h2>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>Women are more concerned than men about outliving their savings and about generating retirement income, according to BlackRock. Yet, they&#8217;re less likely to adopt guaranteed income solutions, the survey found.<\/p>\n<p>&#8220;They&#8217;re living longer. Of anyone who would really need that lifetime income, it would be women, yet they&#8217;re not asking,&#8221; said Jaime Magyera, head of retirement and U.S. wealth advisory at BlackRock.<\/p>\n<\/div>\n<h2 id=\"annuities-a-drop-in-the-ocean-of-401k-assets\" class=\"ArticleBody-subtitle\"><a id=\"headline0\"\/>Annuities &#8216;a drop in the ocean&#8217; of 401(k) assets<\/h2>\n<div class=\"group\">\n<p>Annuity options are available in a small number of employer-sponsored retirement plans, typically within target-date funds. These funds hold a mix of assets that becomes more conservative as retirement approaches. <\/p>\n<p>Structures for those including an annuity vary. Some target-date funds offer an option for older workers to use part of their savings to buy an insurance contract that converts an upfront lump sum into monthly lifetime payments; others allow for the withdrawal of a set percentage of savings each year for the participant&#8217;s life.<\/p>\n<p>A recent survey by the<a href=\"https:\/\/www.psca.org\/news\/psca-news\/2026\/6\/annuitizing-tdfs\/\" target=\"_blank\"> Plan Sponsor Council of America<\/a>, a trade group,<a href=\"https:\/\/www.psca.org\/news\/psca-news\/2026\/6\/annuitizing-tdfs\/\" target=\"_blank\"> <\/a>found that 5% of respondents indicated they offer a target-date fund with an annuity, and 15% said they are considering it.\u00a0<\/p>\n<p>Assets in target-date strategies with annuities grew to $44 billion at the end of March 2026, up from $25 billion a year earlier, according to<a href=\"https:\/\/www.morningstar.com\/content\/cs-assets\/v3\/assets\/blt9415ea4cc4157833\/bltd9e4637261d27afb\/6a07705cbf17f75ee4e5f1c6\/Evaluating_Target_Dates_with_Annuities.pdf\" target=\"_blank\"> Morningstar<\/a>. That&#8217;s less than 1% of the more than $4.8 trillion in target-date funds at the end of 2025.<\/p>\n<p>&#8220;Target-dates with annuities are still a small drop in the ocean of target-date assets, but there are signs that more plans are adopting these strategies and reasons to believe the growth will accelerate,&#8221; according to the Morningstar report.<\/p>\n<p>The <a href=\"https:\/\/www.cnbc.com\/2026\/03\/30\/401ks-alternative-investments.html\">Department of Labor recently proposed a rule<\/a> to make it easier for employers to add alternative assets \u2014\u00a0including <a href=\"https:\/\/www.federalregister.gov\/documents\/2026\/03\/31\/2026-06178\/fiduciary-duties-in-selecting-designated-investment-alternatives\" target=\"_blank\">lifetime income<\/a> investment strategies, such as annuities \u2014 into 401(k), 403(b) and defined contribution plans. There&#8217;s also a <a href=\"https:\/\/www.cnbc.com\/2026\/01\/06\/401k-rollover-annuities.html\">bipartisan bill<\/a>, the Retirement Simplification and Clarity Act, that would allow workers to roll over 401(k) assets into a qualified annuity.<\/p>\n<p>A number of major financial firms, including BlackRock, JP Morgan Asset Management, Fidelity, Vanguard and TIAA, <a href=\"https:\/\/www.cnbc.com\/2025\/12\/09\/vanguard-announces-annuity-option-in-401ks.html\">are expanding<\/a> their annuity-style options within retirement accounts.\u00a0<\/p>\n<\/div>\n<h2 id=\"concerns-about-annuities-in-retirement-plans\" class=\"ArticleBody-subtitle\"><a id=\"headline1\"\/>Concerns about annuities in retirement plans<\/h2>\n<div class=\"group\">\n<p>Some experts say they are skeptical about the suitability of annuities in workplace plans.<\/p>\n<p>&#8220;The guidance from the Department of Labor is all about how to reduce your liability in case your workers try to sue you,&#8221; said Eileen Appelbaum, a senior economist and co-director at the Center for Economic and Policy Research, a think tank that specializes in economic issues.  &#8220;It&#8217;s not about improving guardrails, and it&#8217;s not about raising standards for investment in riskier assets.&#8221;<\/p>\n<p>Financial advisors are often wary of <a href=\"https:\/\/www.cnbc.com\/2026\/04\/24\/retirement-annuities-how-to-buy.html\">annuities<\/a> because of the cost, lack of liquidity, and complexity. While annuities within target-date funds in retirement plans may avoid those issues, it is still important to understand their limitations. <\/p>\n<p>&#8220;You have to be careful on the type of annuity,&#8221; said Silvia Kwan, CEO of Ellevest, a wealth management and financial planning firm.\u00a0<\/p>\n<p>Investors should understand whether lifetime income is available in the fund, whether the monthly payment is fixed or inflation-adjusted, and\u00a0what\u00a0the fees will be, experts say.\u00a0<\/p>\n<p>&#8220;That&#8217;s really where I think having a financial advisor to help you think through that \u2014 not only whether [including] alternatives is appropriate and suitable for you, but also what kind of annuity \u2014 makes sense.&#8221;<\/p>\n<p><em><strong>SIGN UP:<\/strong>\u00a0<\/em><a href=\"https:\/\/www.cnbc.com\/money101\/\"><em>Money 101\u00a0<\/em><\/a><em>is an 8-week learning course on financial freedom, delivered weekly to your inbox. Sign up\u00a0<\/em><a href=\"https:\/\/www.cnbc.com\/money101\/\"><em>here.\u00a0<\/em><\/a><em>It is also available in\u00a0<\/em><a href=\"https:\/\/www.cnbc.com\/dinero101\/\"><em>Spanish.<\/em><\/a><\/p>\n<\/div>\n<div class=\"ArticleBody-googlePreferredSourceContainer\" data-module=\"GooglePreferredSource\" data-id=\"SpecialReportArticle-GooglePreferredSource-6\"><a href=\"https:\/\/www.google.com\/preferences\/source?q=https:\/\/www.cnbc.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.<\/a><\/div>\n<\/div>\n\n<br \/><a href=\"https:\/\/www.cnbc.com\/2026\/06\/25\/annuity-options-are-growing-in-401ks-but-adoption-remains-limited.html\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Johner Images | Johner Images Royalty-free | Getty Images Americans are increasingly worried that retirement will be less&hellip;\n","protected":false},"author":3,"featured_media":44962,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-44961","post","type-post","status-publish","format-standard","has-post-thumbnail","category-investing","cs-entry","cs-video-wrap"],"_links":{"self":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/44961","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=44961"}],"version-history":[{"count":0,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/44961\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/media\/44962"}],"wp:attachment":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=44961"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=44961"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=44961"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}