Cerulli: DC retirement income options need advice to drive adoption

Putting a retirement income option on a defined-contribution plan menu does not mean participants will use it or understand why it matters, Cerulli Associates says. The finding is in the U.S. Defined Contribution Distribution 2026 report, released this week and covered by 401(k) Specialist.

"Given the high degree of personalization that goes into developing and executing on a retirement income strategy, meeting the needs of all, or even most, participants with a single retirement income solution is challenging," Cerulli director Chris Bailey said in a release.

46% of participants want to be able to withdraw money at any time, while 39% want a guaranteed monthly payment that continues after their savings run out. Another 40% want a personalized, detailed and actionable plan to follow in retirement, and 31% want the ability to change their investments.

Cerulli recommends more advice and planning for participants, deeper education for plan sponsors and intermediaries, and recordkeeper infrastructure that supports lifetime income options. Industry consultants quoted in the research say plan sponsors may have to offer two or three different options per plan to satisfy participants' varied needs.

Recordkeepers are already the default rail for bringing income inside the plan. J.P. Morgan broadened access to SmartRetirement Lifetime Income on Retirement Link through an expanded connection with Empower, as 401(k) Specialist reported on Oct. 7. Cerulli and Morningstar reported this month that 10.2% of advisers' wealth clients come from DC plans.