Many Americans are growing increasingly worried that their retirement outlook may not be as stable as that of their parents.
A recent survey revealed that 76% of workplace savers believe their generation faces more uncertainty regarding retirement income compared to earlier generations. This figure has risen from 67% in 2021, according to findings from BlackRock’s investigation. Respondents also displayed a keen interest in retirement plan features that ensure regular income during retirement.
BlackRock collaborated with research firm Escalent to survey 1,312 workplace savers between April 15 and May 16.
Interestingly, the findings indicated that women are generally more concerned than men about the possibility of outliving their savings and the need to generate income for retirement. Yet, despite these fears, women tend to be less inclined to opt for guaranteed income solutions, as noted in the study.
“Women are living longer. They’re the ones who really need that lifetime income, and yet they’re not asking for it,” remarked Jaime Majella, head of retirement and U.S. wealth advisory at BlackRock.
Pensions represent a small fraction of 401(k) assets.
Pension options are limited within employer-sponsored retirement plans and are commonly found within target date funds, which typically employ a more conservative asset mix as retirement approaches.
Target date funds might offer older workers the chance to convert part of their savings into monthly lifetime payments through a policy. Others allow participants to withdraw a certain percentage of their savings annually over their lifetime.
A survey from the Plan Sponsor Council of America indicated that only 5% of respondents offer target date funds with an annuity feature, while 15% are considering it. Assets in target date strategies incorporating annuities have grown to $44 billion as of March 2026, a significant increase from $25 billion the previous year. However, this still represents less than 1% of the total target date funds, which exceed $4.8 trillion.
“Target-date pensions are a small drop in the bucket compared to target-date assets overall, but there are indications that more plans are adopting these strategies, and growth could be on the horizon,” stated a report from Morningstar.
The Department of Labor has recently proposed rules aimed at simplifying the process for employers to incorporate new assets. A bipartisan initiative, the Retirement Simplification and Clarity Act, is also in play, allowing workers to roll over 401(k) assets into qualified pension plans.
Many large financial firms, including BlackRock, JPMorgan Asset Management, Fidelity, Vanguard, and TIAA, are expanding their annuity-style options within retirement accounts.
Concerns regarding pensions in retirement plans
Some experts express skepticism about the appropriateness of pensions in workplace retirement plans.
“The Department of Labor’s guidelines seem primarily focused on reducing liability for employers in case of lawsuits, rather than improving regulations to encourage investing in higher-risk assets,” said Eileen Appelbaum, co-director and senior economist at the Center for Economic Policy Research.
Financial advisors often have reservations about pensions due to issues of cost, liquidity, and complexity. While incorporating an annuity in a target date fund may mitigate some of these concerns, it remains crucial to understand the specifics involved.
“That’s where having a financial advisor can be invaluable. It’s essential to ensure that the alternatives are suitable for your needs, and to determine what kind of annuity makes the most sense,” she added.
