Retirement Income Options Evolve as U.S. Workers Frequently Change Jobs

What's Happening?

As U.S. workers change jobs frequently, retirement income options are evolving to accommodate this trend. The Employee Benefit Research Institute (EBRI) found that nearly one-fourth of workers switch employers in any two-year period, impacting their participation in retirement plans. In-plan retirement income options are rapidly evolving, with systematic withdrawals, hybrid target date funds, and managed accounts offering customization and personalization. These options aim to support decumulation needs in retirement, providing stability and flexibility for workers who experience frequent job changes.

Why It's Important?

The evolution of retirement income options is crucial for workers who change jobs frequently, as it ensures they have access to flexible and stable retirement plans. By offering systematic withdrawals and hybrid target date funds, plan sponsors can provide workers with options that cater to their specific needs and preferences. This approach helps workers manage their retirement savings effectively, even as they switch employers. The focus on customization and personalization in managed accounts highlights the importance of addressing individual decumulation needs, ensuring workers can achieve financial security in retirement.

What's Next?

Plan sponsors are encouraged to consider their demographics and offer retirement income options that make sense for their population. Communication and education are key to ensuring workers understand their options and make informed decisions about their retirement plans. As retirement income options continue to evolve, plan sponsors will need to stay informed about new developments and adapt their offerings to meet the changing needs of workers.