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Published: Dec 01, 2021 6 min read
Fidelity NYC Office Building

Annuities may be coming to your 401(k). Last month, Fidelity Investments rolled out its Guaranteed Income Direct platform, an option that can turn part or all of your retirement savings into a stream of predictable monthly payments for life — all without leaving your 401(k) account.

This is an emerging trend, and retirement savers can expect to see more plan providers offering similar options, which add an important income component to your plan, experts say.

“The issue with 401(k) plans is that they were designed for retirement income, but most companies only offered investing strategies,” says Wade Pfau, co-director of the Retirement Income Center at The American College of Financial Services. “So it's great to see they now are increasingly having annuity options or other kinds of ways to implement a retirement strategy.”

Guaranteed Income Direct allows employers that use the plan administration company's services to select immediate income annuities from insurers of their choice. Participants also get access to Fidelity’s digital tools and retirement-income educational resources. Nearly 8 million workers nearing retirement have their 401(k) through Fidelity, but their employer must choose the annuity option in order for it to be available to them.