Encore: It’s harder than you think to spend down your 401(k) account in retirement

Retirement experts say the lack of an easy drawdown mechanism in 401(k) plans is a major challenge facing the 401(k) system.

In 2014, the Treasury Department and the IRS issued guidance that made longevity annuities accessible to 401(k) plans and that enabled target date funds to include annuity contracts either as a default or as a regular investment option. But individual plan sponsors feel under siege by lawsuits and see little payoff to being innovative. At the same time, Congress is unlikely to mandate that annuities be a part of 401(k) arrangements.

So we are at a standstill.

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