Today, Americans bear more financial responsibility for their retirement than ever.
The days of receiving monthly pension checks are gradually fading. According to Willis Towers Watson, only 16% of Fortune 500 companies were offering pensions to new hires in 2017, down from 59% of firms in 1998.
Defined-contribution plans like 401(k) accounts are taking their place. And this shift is huge. Now, people must count on them, IRA assets, and personal savings to create income streams that might need to last for a very long time.
How long? Potentially decades. The Society of Actuaries estimates that among married couples who are 65, there is a 72% chance that one spouse will live to 85. Not just that, one of them has a 45% chance of reaching age 90.
In other words, someone may spend as much as one-third of their life in retirement. In the face of that, how do you ensure your nest egg lasts for the rest of your lifetime?
While the answer is different for everyone, a new study offers some fresh insights. The Georgetown University Center for Retirement Initiatives partnered with Willis Towers Watson to explore different ways to generate income in defined-contribution retirement plans.
Their findings show how various lifetime income options, whether as a combination or as stand-alones, can help retirees better enjoy lifelong financial confidence.
