The Shift from Pensions to Personal Responsibility

Key Takeaways

• Traditional company-backed pensions have largely been replaced by self-managed retirement accounts.
• Retirees now need to create their own“retirement paycheck” from savings.
• Income strategies that recreate pension-likestability have become increasingly important.

For decades, many retirees could count on employer-sponsored pensions to provide a stream of steady, lifelong paychecks after retirement. Today, those pensions have largely disappeared, replaced by 401(k)s and IRAs that put the responsibility of managing retirement income on individuals.

This shift is significant. The job of turning savings into reliable income has moved from companies to retirees themselves. Instead of receiving a guaranteed monthly check from a former employer, retirees now need to decide how much to withdraw from their saving or investment portfolio, when to withdraw it, and how to protect that income from market downturns.

Without a clear income strategy, retirees are left facing difficult questions:

• How much can I safely spend each year?
• What happens to my income if markets decline?
• Will my money last if I live into my 90s orbeyond?

Because of these shifts, many retirees are now looking for ways to recreate pension-like income on their own. Understanding the tools and strategies that can help you build a kind of “personal pension” is a crucial part of navigating today’s retirement landscape.

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Disclosures:

This material is provided for educational purposes only and does not constitute investment, legal, tax, or insurance advice. It should not be relied upon as a recommendation to purchase, sell, or exchange any security or insurance product. Investors should consult their financial, tax, and legal professionals before making financial decisions.

Annuities are insurance products issued by insurance companies. Guarantees are subject to the claims paying ability and financial strength of the issuing insurer. Product features, limitations, fees, surrender charges, and availability vary by contract and carrier.