Greater 401(k) Focus on Retirement, But Not Annuities
About 93% of employers are very likely or likely to “create or broaden focus on financial well-being of employees beyond retirement” this year, according to an Aon Hewitt survey. Yet the focus for many employers will not extend to including annuities or other similar lifetime income products as investment options in defined-contribution [e.g., 401(k)] plans.
Aon Hewitt says seven Americans are reaching age 65 every minute. Given this, it is not surprising that nearly three-quarters of plan sponsors will experience an increase in retirement-eligible employees over the next three years. In response, 52% of employers say they are very likely and 38% say they are likely to offer retirement planning to near-retirees. Slightly more than half (51%) are very likely and 38% are likely to increase communication about the retirement process. Online modeling tools and mobile apps designed to help employees determine how much they will be able to spend in retirement may be made available by 53% of employers (“moderately likely action”), with 17% seeming more certain about providing them (“very likely action”).