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More people are turning 65 this year than ever before. That has sparked a gold rush for the retirement industry

·1 min

More Americans are reaching the age of 65 than ever before, with projections indicating this trend will continue to rise. This demographic shift has driven the introduction of various retirement products; however, not all of them offer ideal solutions. While some individuals benefit from union-sponsored annuities and pension plans, these kinds of options are becoming less common. Instead, 401(k) plans have become increasingly prevalent, putting the responsibility of saving for retirement on employees. Many individuals struggle to save adequately for retirement, leaving them heavily reliant on Social Security benefits, which are typically modest. Approximately 50% of people have no savings in retirement accounts. Despite these challenges, recent legislation has enabled employers to offer employees access to lifetime annuity products within their 401(k) plans. Financial companies have introduced new investment options that mimic traditional pensions, promising a reliable income stream. Notably, BlackRock and Nationwide offer target-date retirement funds with annuity options, allowing retirees to receive annuity payments based on a percentage of their retirement account balance. While these innovative products provide guarantees, they also come with downsides such as potentially smaller payments for spouses, limitations on passing payments to children, and limited access to funds. Such considerations warrant careful evaluation and analysis before choosing these options.