Generating Retirement Income Just Got Easieror Did It? [Video]

Key Takeaways

• Target-date funds are a great way for the average person to save for retirement. These are typically the default options on 401(k) plans. That’s how most investors access them. So, for hands-off investors, they are great.
• These new target-date funds are trying to build off the success we’ve seen in target-date funds, which had about $3.5 trillion in assets as of the end of last year, and sneak in a guaranteed-income option. So, as you’re getting closer to retirement, you’ll start accumulating assets that can be converted into an annuity at retirement.
• The option to annuitize is good for people in the middle class. If you’re at the lower end of the income spectrum, Social Security is going to replace a lot of your income in retirement.
• Target-date funds with annuities are available through collective investment trusts, which are only available through 401(k) plans. It’s going to be up to …