Two-thirds of retirement income now comes from sources that future retirees won't be able to count on. Defined-benefit plans (which are pension plans) are disappearing in the private sector and are under pressure in the government sector, while Social Security benefits are expected to shrink, especially for higher income beneficiaries.
Defined-contribution plans (such as 401k plans) will be the primary source of retirement income, but hardly any of them offer assured-income features.
In a Brightwork Partners survey of nearly 3,300 working Americans, Putnam found that workers who were best prepared for retirement (on track to replace 100 percent or more of their current income) differed from those who were least prepared (like to replace 45 percent or less) not in how much they earned, but in having access to an employer savings plan and saving 10 percent or more of their income.
So, the big questions is after years of contributing to retirement plans, how do you start to take money from your retirement accounts and not run out of money? More and more individuals are solving the distribution dilemma by using investment products to give a set income stream every month.