Defined-contribution plans have become the norm for workers in today's employment environment, with Gen X and Gen Y having virtually no first-hand experience with defined-benefit plans.
Many seniors still have a defined-benefit pension somewhere in their retirement plan, but as the oldest boomers begin to retire, they do so with as many 401(k)s and pensions. Smart boomers and seniors – with help from their advisors – realize the lump sum they get from their 401(k) plan will have to last the rest of their (hopefully) long and prosperous lives. That presents a conundrum for some: How can I make my money last that long?
More employers are realizing what senior advisors have long known. Annuities are a key component to making money last. Watson Wyatt Worldwide, a research and consulting firm, says more companies, faced with the realities of the new retirement landscape, are going to look at annuities as another investment option in company 401(k) plans.
