For decades, the main retirement message was simple: save consistently, contribute to your 401(k), get the employer match if available, and build your account balance over time.
That advice still matters.
But as more workers approach retirement, the conversation is beginning to shift. The question is no longer only, “How much have you saved?” It is also, “How will those savings become income?”
A recent CNBC article highlighted this change by looking at the growth of annuity options inside some 401(k) plans. While adoption remains limited, the trend points to a larger issue in retirement planning: many people have retirement savings, but not everyone has a clear plan for turning those savings into reliable income.
Why Retirement Income Is Getting More Attention
According to the CNBC article, about 76% of workplace savers surveyed by BlackRock said they believe their generation will have less certainty about retirement income than previous generations.
That concern makes sense.
Many retirees no longer have traditional pensions. Instead, much of retirement planning now depends on individual savings accounts such as 401(k)s, IRAs, and personal investments. Those accounts can be powerful accumulation tools, but they do not automatically answer the retirement income question.
A 401(k) can help someone save for retirement. But once retirement begins, that person still needs to decide how to withdraw money, how to manage taxes, how to respond to market volatility, how to coordinate Social Security, and how to make income last.
That is why more retirement plans and financial firms are exploring income-focused solutions.
Annuity Options Are Growing, But Still Limited
The CNBC article noted that annuity options are available in a small number of employer-sponsored retirement plans, often within target-date funds.
Target-date funds are designed to become more conservative as a worker gets closer to retirement. Some newer versions include annuity-style features that may allow a portion of savings to be converted into monthly lifetime payments or provide a withdrawal structure designed to last for life.
Even so, adoption remains limited.
CNBC cited a Plan Sponsor Council of America survey showing that 5% of respondents said they offer a target-date fund with an annuity, while 15% said they are considering it.
Morningstar data cited in the article showed that assets in target-date strategies with annuities grew to $44 billion at the end of March 2026, up from $25 billion a year earlier. However, that still represents less than 1% of the more than $4.8 trillion in target-date fund assets at the end of 2025.
In other words, the trend is growing, but it is still early.
Savings and Income Are Not the Same Thing
The growing interest in annuities inside 401(k)s highlights an important retirement planning concept: retirement savings and retirement income are not the same thing.
A retirement account tells you what you have accumulated.
A retirement income plan helps explain how that money may be used.
For example, a retiree may need to consider:
- Which income sources are predictable
- Which accounts should be used first
- How much money should remain liquid
- How taxes may affect withdrawals
- What happens if markets decline early in retirement
- Whether income would continue for a surviving spouse
- Which dollars are meant for growth, income, safety, or legacy
These questions are difficult to answer by looking only at an account balance.
That is why retirement income planning often includes conversations about Social Security, pensions, annuities, IRA withdrawals, taxes, cash reserves, healthcare costs, and market risk.
Why Annuities Are Part of the Conversation
Annuities are receiving more attention because some retirees want more certainty around income.
That does not mean every annuity is the same. It also does not mean every retiree needs one.
Different types of annuities have different purposes, features, costs, liquidity rules, surrender schedules, and income options. Some are designed primarily for lifetime income. Others may focus more on protection from direct market losses, interest-crediting potential, or legacy features.
For example, a Fixed Indexed Annuity may be worth understanding for retirees who want part of their retirement savings positioned away from direct market losses while still having the potential to earn interest based in part on the performance of a market index.
A fixed indexed annuity is not designed to replace every part of a retirement plan, and it is not appropriate for everyone. But for certain retirees, it may be one way to give a portion of their money a specific job: protection, income potential, or greater stability within a broader plan.
To learn more about how this type of strategy works, visit our educational page on Fixed Indexed Annuities.
Why Caution Still Matters
The CNBC article also noted that some experts remain cautious about annuities inside workplace retirement plans.
That caution is important.
Annuities can be complex. Retirees and workers need to understand what type of annuity is being used, whether income is available, whether payments are fixed or adjusted for inflation, what fees apply, how liquidity works, and what limitations may exist.
This is why education matters before making decisions.
An annuity should not be evaluated only by the word “annuity.” The details of the contract, the purpose of the money, the need for access, the income goal, and the rest of the retirement plan all matter.
The better question is not, “Are annuities good or bad?”
The better question is, “What job does this money need to perform, and does this strategy fit that job?”
What Retirees Should Consider
If you are approaching retirement, the growing attention around annuities in 401(k)s is a reminder to review your own income plan.
A helpful review may include:
- Social Security claiming decisions
- Pension income, if available
- 401(k), IRA, or rollover options
- Taxable withdrawals and required minimum distributions
- Cash reserves and liquidity needs
- Market volatility and sequence-of-returns risk
- Healthcare and long-term care concerns
- Safe-money or protected income strategies
- Legacy and beneficiary planning
Not every plan will use every tool. The goal is to understand how the pieces work together and which strategies may help address your specific concerns.
For more education on safe-money strategies, you can visit our page on fixed indexed annuities. If your concerns are more focused on tax-advantaged income, chronic care, or legacy planning, you may also want to review our page on life insurance in retirement.
The Bottom Line
The growth of annuity options in some 401(k) plans reflects a larger shift in retirement planning.
Saving for retirement is still important. But eventually, those savings need to become income.
That requires a different kind of conversation.
For some retirees, Social Security and savings may be enough. For others, pensions, annuities, tax-advantaged strategies, or other income tools may be worth reviewing as part of a broader plan.
The goal is not to follow a trend. The goal is to understand what each part of your retirement money is supposed to do.
If you are nearing retirement and wondering how your savings may become income, it may be worth reviewing your options before decisions need to be made under pressure.
Source: CNBC, “Annuity options are growing in 401(k)s, but adoption remains limited.”
