Workers Overwhelmingly Call on Employers to Offer Lifetime Income in 401(k) Plans

Rhea-AI Summary

A new survey by Nuveen and TIAA Institute reveals overwhelming support for lifetime income options in 401(k) plans. 93% of workers consider it important for retirement plans to offer guaranteed monthly income options, while 87% believe employers share responsibility for retirement security. This marks a significant increase from 2021, when only 60% held this view. Around 90% of participants support fixed annuity inclusion in 401(k) plans and would consider using them. Currently, despite managing $6.8 trillion in assets and serving 79 million active participants, typical 401(k) plans lack guaranteed lifetime income conversion options. The survey highlights a growing demand for retirement income security and educational support to help workers effectively convert savings into sustainable monthly income during retirement.

Positive

• Strong market demand with 93% of workers wanting guaranteed monthly retirement income options
• Significant increase in worker interest from 60% in 2021 to 87% in 2025
• 90% of participants show interest in fixed annuity products
• Large addressable market with 79 million active participants and $6.8 trillion in assets

Negative

• Current 401(k) plans typically lack guaranteed lifetime income conversion options
• Knowledge gap exists among participants in converting savings to sustainable monthly income
• Educational challenges in helping workers develop effective withdrawal strategies

Nuveen and TIAA Institute survey shows vast majority of workers believe retirement income security is a shared responsibility

NEW YORK, May 19, 2025 /PRNewswire/ -- Almost all workers saving in 401(k) plans (93%) say it is important for their retirement plans to provide options for converting savings into guaranteed monthly retirement income that never runs out, while 87% think employers have a responsibility to help employees achieve retirement income security.

This is according to a new survey of over two thousand 401(k) participants by Nuveen, the investment manager of TIAA, and the TIAA Institute.

These findings represent a dramatic increase in interest in guaranteed lifetime income. When asked in 2021, less than six in 10 workers said that their employers had a responsibility to provide access to lifetime income in retirement.

In fact, the survey released today found that about 90% of 401(k) participants:

• Think it would be valuable for 401(k) plans to include a fixed annuity
• Would be interested in saving with a fixed annuity if it was included in their plan
• Would consider using a fixed annuity to provide steady monthly income throughout retirement
• Agree it would be valuable for their target-date investments to include a fixed annuity component

The Critical Gap
Today, the typical 401(k) plan does not offer a way to convert savings into consistent monthly income that is guaranteed for a retiree's lifetime - despite 401(k) plans being the dominant form of retirement savings in the private sector, with 79 million active participants and $6.8 trillion in assets.ⁱ

Innovation in Action
In response, innovative 401(k) plan sponsors are exploring how to offer guaranteed retirement income by adding fixed annuities to a retirement plan.

"Incorporating fixed annuities into 401(k) plans is a simple, effective and low-cost way to fill the retirement income design gap. With tools like target-date investments that include a fixed annuity component, sponsors can simplify savings and investing, as well as the ability to convert retirement savings into retirement income," said Brendan McCarthy, head of Retirement Investing at Nuveen. "A well-designed decumulation strategy isn't just a nice-to-have, it is essential to realizing the full value of a 401(k) plan—and workers agree."

The Need for Education
"While retirees are increasingly interested in lifetime income solutions, many struggle to develop effective withdrawal strategies," said Surya Kolluri, head of the TIAA Institute. "The challenge lies in converting retirement savings into sustainable monthly income—a process that remains unclear to most participants. This knowledge gap makes education and thoughtful plan design more crucial than ever to prevent potentially costly financial missteps at and during retirement."

Plan sponsors can bridge this gap and boost employees' retirement confidence—especially for those nearing retirement—by providing focused and regular education programs about retirement benefits and how to convert savings into lifetime income.

"Today's workers see guaranteed retirement income not just as a personal goal - but as a shared mission with their employer," said McCarthy. "By acknowledging that they can play a critical role in offering financial security after retirement, plan sponsors can establish trust and goodwill among employees—potentially for a long time."

For more information and to see the full results of the survey, go to Nuveen.com/participant-perspectives.

About Nuveen     
Nuveen, the investment manager of TIAA, offers a comprehensive range of outcome-focused investment solutions designed to secure the long-term financial goals of institutional and individual investors. Nuveen has $1.3 trillion in assets under management as of 31 Mar 2025 and operations in 32 countries. Its investment specialists offer deep expertise across a comprehensive range of traditional and alternative investments through a wide array of vehicles and customized strategies. For more information, please visit www.nuveen.com.

About TIAA Institute 
The TIAA Institute is a think-tank within TIAA, conducting cutting-edge research in the areas of financial literacy and longevity literacy, lifetime income, retirement plan design and behavioral finance in the context of retirement. The Institute provides consulting services for higher education and the broader nonprofit sector. For more information, please visit TIAAinstitute.org.

About TIAA  
TIAA is a leading providerⁱⁱ of secure retirements and outcome-focused investment solutions to millions of people and thousands of institutions. It shared $5 billion with participants in 2023, on top of the stated guarantees, and has $1.4 trillion in assets under management (as of 3/31/2025).ⁱⁱⁱ For more information, please visit TIAA.org.

Press Contact:
Elizabeth Anderson
Media@tiaa.org

ⁱ EBSA, 2024.
ⁱⁱ As of June 3, 2024. Based on data in PLANSPONSOR's 2024 DC Recordkeeping Survey, #1 by total 403(b) assets and #1 by 403(b) ERISA plans.
ⁱⁱⁱ As of March 31, 2025, assets under management across Nuveen Investments affiliates and TIAA investment management teams are $1,373 billion.

This material is not intended to be a recommendation or investment advice, does not constitute a solicitation to buy, sell or hold a security or investment strategy, and is not provided in a fiduciary capacity. The information provided does not take into account the specific objectives or circumstances of any particular investor, or suggest any specific course of action. Financial professionals should independently evaluate the risks associated with products or services and exercise independent judgment with respect to their clients.

Investing involves risk; principal loss is possible.

Any guarantees are backed by the claims-paying ability of the issuing company.  Converting some or all of your savings to income benefits (referred to as "annuitization") is a permanent decision. Once income benefit payments have begun, you are unable to change to another option.

View original content to download multimedia:https://www.prnewswire.com/news-releases/workers-overwhelmingly-call-on-employers-to-offer-lifetime-income-in-401k-plans-302459100.html

SOURCE Nuveen

FAQ

What percentage of 401(k) participants want guaranteed monthly retirement income options in 2025?

93% of 401(k) participants say it's important for their retirement plans to provide options for converting savings into guaranteed monthly retirement income that never runs out.

How many active participants and assets are currently in 401(k) plans?

401(k) plans currently have 79 million active participants and manage $6.8 trillion in assets in the private sector.

What percentage of workers believe employers are responsible for retirement income security?

87% of workers believe employers have a responsibility to help employees achieve retirement income security, up from less than 60% in 2021.

What percentage of 401(k) participants are interested in fixed annuities in their plans?

About 90% of 401(k) participants would be interested in saving with a fixed annuity if it was included in their plan and would consider using it for steady monthly income throughout retirement.

What is the main challenge for retirees regarding lifetime income solutions?

The main challenge is converting retirement savings into sustainable monthly income, a process that remains unclear to most participants, creating a knowledge gap that requires education and thoughtful plan design.