Growing Demand for Lifetime Income Solutions in Retirement Plans Charted by TIAA Survey

Increasing Demand for Lifetime Income in Retirement Plans

A recent survey conducted by TIAA highlights a significant shift in employer attitudes towards retirement planning, particularly regarding lifetime income solutions. With approximately 76% of defined contribution plan sponsors anticipating a growing need for annuities over the next five years, the landscape of retirement savings is on the verge of transformation. This marks a notable shift from traditional saving approaches to more sustainable options that can provide financial security throughout retirement.

The Impact of the SECURE Act

Five years post the introduction of the SECURE Act, which eased the incorporation of annuities into retirement plans, TIAA's findings underscore increased optimism among employers about the role of lifetime income in fostering overall retirement security. Many employers, acknowledging the likelihood of pension plans declining, are proactively seeking ways to ensure that employees can sustain their savings as they age. Kourtney Gibson, CEO of TIAA Retirement Solutions, points out that with Social Security's viability in question and life expectancies lengthening, offering viable lifetime income options is becoming essential.

Among the employers surveyed, more than 40% who currently do not provide annuities expressed intentions to integrate these options within the next two years. As reliance on defined contribution plans grows, so does the necessity to adapt to emerging trends that support long-term financial health for retirees.

Barriers to Adoption

Despite the positive outlook, the survey also reveals challenges that may inhibit the adoption of annuities in retirement plans. The lack of understanding—termed