As defined benefit pension plans become increasingly scarce in the private sector, growing numbers of American workers will need to create their own source of lifetime income. Defined contribution (DC) plans such as 401(k)s must evolve from being just savings plans. The passage of the SECURE Act in 2019 has made it clear that plan sponsors should be doing more to help workers generate an adequate amount of lifetime retirement income.
The challenge is that in a DC plan world, workers bear a significant amount of risk in their journey to generate that lifetime retirement income. Fortunately, solutions are now available that can be adopted to help mitigate many of those risks.