In response to growing concerns among US employees about the sustainability of their retirement savings, MetLife has teamed up with Fidelity Investments to put guaranteed lifetime income within the reach of more everyday Americans.
Under the newly announced partnership, MetLife is working with the investment giant to make the MetLife Guaranteed Income Program, a fixed immediate income annuity, available through Fidelity’s new retirement solution.
By incorporating the annuity product into Fidelity's Guaranteed Income Direct offering, the partnership is taking aim at the financial insecurities plaguing retirees across the US.
“At MetLife, we believe simplicity should be the guiding principle when offering income annuities, and this solution makes it simple for plan sponsors to offer guaranteed income and simple for plan participants to annuitize their savings,” Melissa Moore, the insurance provider’s senior vice president and head of annuities, said in a statement.
According to research by MetLife, seven-tenths of U.S. workers (71 percent) are worried that they could outlive their retirement funds – a significant increase from 60 percent just two years earlier – underscoring the need for solutions that offer income for life.
Since the SECURE Act was passed into law in late 2019, MetLife said there’s been increased interest in guaranteed income products among plan participants. The removal of fiduciary barriers to offering workplace-provided lifetime income solutions has also helped accelerate adoption among plan sponsors in recent years.
While employees have the option to collect their retirement benefits as a lump sum from their DC plan, research suggests they’re unable to make it last for long. One study by MetLife found that one in three retirees (34 percent) who took a lump-sum payment upon retirement exhausted that windfall within five years on average.
That’s something employers are taking seriously, according to research from J.P. Morgan Asset Management, which found nine out of 10 defined-contribution plan sponsors consider it a priority to offer investment options that would help participants get income as they go through retirement.
“We are committed to ensuring financial security for retirees and are pleased to be working with Fidelity Investments and middleware provider Micruity, who share our dedication to enabling positive retirement outcome,” Moore said.
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