A 401(k) with lifetime income you say? How can that be you ask? It turns out that quite a few American companies are finally coming to realize that they might be sending their hard working employees “down the river with no paddle” in their current 401(k) plans. To make things better, a slowly growing movement has been to add annuities (aka pensions) to the 401(k) plan. One of the first big 401(k) plans to offer annuities to their employees was the airline powerhouse Southwest Airlines (read about Southwest putting annuities in their 401(k) here). Another new large employer, United Technologies, just announced a similar annuity addition to their 401(k) plan for their 200,000 employees. Although you can’t yet allocate all of your money to the annuity like you would in a traditional pension annuity, this is still an incredible step in the right direction.
Stay tuned for updates on new corporations that are wising up to the weakness of the 401(k) and it’s lack of contractual lifetime income that annuities can provide.