From Saving to Income: The Next Evolution of Defined Contribution Plans

PGIM DC

January 2020

Key Takeaways

  • A major challenge for workers is generating a sustainable amount of lifetime income in retirement.

  • The SECURE Act mandates that DC plans provide plan participants with projections of future retirement income.

  • The next generation of DC plans has the potential to help workers meet their retirement income challenges.

 

One of today’s greatest financial wellness challenges for workers is generating an adequate and sustainable amount of lifetime income in retirement. Defined contribution plans primarily focus on helping participants accumulate retirement savings, not converting those savings into a steady stream of lifetime income. This can leave workers vulnerable to a wide array of risks once managed by defined benefit plans including longevity risk, market risk, inflation risk, interest rate risk, and sequence of returns risk.

In our new white paper, we look at today’s defined contribution plans such as 401(k)s, and how they are likely to evolve.
 

READ THE WHITEPAPERPDF opens in a new window
 

Related Content

The SECURE Act and its Impact on Lifetime Income

In a recent article, Josh Cohen provides answers to common questions you may have on the SECURE Act and its impact on the DC marketplace.

Finding Common Ground in the SECURE Act Provisions

With 29 different provisions, the recently passed SECURE Act has been widely praised for its various enhancements to the U.S. retirement system.