Retirement planning in the United States has long focused on one thing: saving. Employers and policymakers have spent decades encouraging workers to build their retirement funds, automating savings mechanisms, and offering incentives to participate. But as retirement itself evolves into a decades-long phase of life, the conversation must shift beyond savings to a more pressing question—how to make that money last.
TIAA’s first-ever Building a Better Retirement survey (2004) asked 500 HR and finance leaders across 17 industries about the future of retirement planning.
The findings reveal a growing consensus: employers need to go beyond accumulation strategies and help employees convert savings into lifelong income.
The Shift from Savings to Sustainable Income
For years, retirement plans have prioritized contributions, employer matches, and investment options. But many employers now recognize that’s only part of the equation. While 88% of employers offer automatic enrollment in defined contribution (DC) plans and 89% provide target-date funds, these tools don’t address the real challenge of retirement: ensuring a steady income after paychecks stop.
The Growing Role of Annuities
One of the most striking findings from the survey is that 42% of plan sponsors who don’t currently offer annuities expect to add them within the next two years. Much like target-date funds, which became widespread after the Pension Protection Act of 2006, annuities are poised to gain traction following the SECURE Act’s recent provisions supporting in-plan annuities.
Employers increasingly see annuities as a way to offer guaranteed lifetime income, bridging the gap between retirement savings and financial security in later years. In fact, 76% of employers say the momentum for lifetime income solutions will continue to grow over the next five years.
Why It Matters Now
Several factors are driving this shift:
Longer Retirements: Americans are living longer, more active retirements. With rising healthcare costs and financial uncertainties, retirees need sustainable income streams beyond Social Security.
Debt in Retirement: More than 40% of Americans over 65 still have mortgages, and many carry additional financial obligations, making income stability even more critical.
Employer Benefits & Workforce Planning: A well-structured retirement plan benefits both employees and employers. Ensuring workers can retire on time reduces benefits costs and opens pathways for new talent.
Bridging the Knowledge Gap
Despite growing interest in annuities, many employers still struggle with implementation. The survey found that 63% of plan sponsors aren’t fully comfortable explaining how annuities work. As a result, they’re looking to consultants and providers to help them build their “annuity fluency” and integrate these options effectively.
The Future of Retirement Planning
Employers have successfully guided workers through the saving process—now, it’s time to apply the same strategies to the spending phase of retirement. By embracing solutions that provide lifetime income, companies can help employees retire with confidence while strengthening their workforce strategies.
As the conversation around retirement continues to evolve, one thing is clear: the focus is shifting from simply saving for retirement to living in retirement with security and stability. Employers hold the key to making that transition seamless for their workforce.
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