Three in Four Workers Fear Retirement Will Be Less Secure Than Their Parents

A growing share of American workers have arrived at a sobering conclusion: retirement will be harder for their generation than it was for the one before them. That sentiment — now held by three in four workplace savers — is shaping how the retirement industry is responding, and it is accelerating the integration of guaranteed income into the 401(k) plans that most workers depend on.

BlackRock’s 2026 Read on Retirement report, based on a survey of 1,312 workplace savers conducted with research firm Escalent between April 15 and May 16, 2026, finds that 76% of respondents believe their generation will have less certainty about retirement income than previous generations. That figure has climbed steadily from 67% in 2021, reaching a new high for the survey series. Nearly two-thirds — 64% — said they worry about outliving their savings.

Why This Generation Feels Different

The anxiety is not arbitrary. The retirement landscape has shifted structurally over the past several decades in ways that place more responsibility on individuals and less on employers and institutions. Traditional defined benefit pensions — which provided a guaranteed monthly income for life — have largely disappeared from the private sector. The Bureau of Labor Statistics now finds that only about 15% of private-sector workers have a traditional pension plan, down from a majority in prior generations.

What replaced pensions was the defined contribution plan — primarily the 401(k) — which shifted the burden of retirement saving, investing, and income distribution to employees. DC plans have helped many workers accumulate meaningful savings. But they do not, by design, provide guaranteed income. At retirement, workers face a lump sum and the daunting task of turning it into income that lasts — potentially for 25 or 30 years — without a roadmap or institutional support.

“Confidence is growing, but for too many Americans, retirement reality won’t match retirement expectations,” said Jaime Magyera, head of retirement and U.S. wealth advisory at BlackRock. That gap between expectation and outcome is what the current wave of product innovation is attempting to close.

The Rise of Annuities Inside 401(k)s

The most significant structural response to this demand is the integration of guaranteed income — in the form of annuity contracts — directly into the target-date funds that already serve as the primary investment vehicle for millions of 401(k) participants.

Target-date funds are mutual funds that automatically shift from growth-oriented assets to more conservative ones as a participant approaches a target retirement date. They have become the default investment for most workplace retirement plans, with total assets approaching $5 trillion. The new generation of these funds adds an annuity layer that activates at or near retirement, converting a portion of savings into a guaranteed monthly income stream for life.

Morningstar’s research paper “Guaranteed Income in DC Plans: Evaluating Target-Date Funds with Built-In Annuities” finds that assets in target-date strategies with embedded annuity components grew to $44 billion at the end of the first quarter of 2026 — up roughly 70% from $25 billion a year earlier. The growth is striking. The scale remains modest: $44 billion represents less than 1% of the $4.8 trillion target-date universe. But the trajectory is clear.

“Target-dates with annuities are still a small drop in the ocean of target-date assets, but there are signs that more plans are adopting these strategies and reasons to believe the growth will accelerate,” according to the Morningstar report.

Who Is Building These Products

The firms now offering annuity-embedded target-date products represent the largest names in the retirement industry. BlackRock’s LifePath Paycheck strategy grew from $9 billion to more than $25 billion in assets between mid-2024 and late 2025. Vanguard has incorporated TIAA’s Secure Income Account as a lifetime income bridge within its target-date series. Fidelity has announced its Freedom Lifetime fund, set for a 2027 debut, which will allow participants between ages 59 and 78 to convert up to 25% of their target-date assets into an income annuity backed by Nationwide and New York Life.

JPMorgan Asset Management and TIAA are also expanding their offerings. The competitive dynamic among these firms is accelerating product development and pushing guaranteed income toward the mainstream of retirement plan design.

“2026 will mark a significant period when plan sponsors move from exploration to execution,” predicted Kevin Crain, executive director of the Institutional Retirement Income Council.

How These Products Work

While structures vary across providers, the core concept is consistent: a portion of the participant’s target-date fund balance is gradually allocated toward an annuity component, which then converts to guaranteed lifetime income at or near retirement. The remaining balance stays invested in stocks and bonds, providing flexibility and growth potential.

BlackRock’s own research illustrates the potential impact. Running 100,000 simulations across four income groups, the firm found that 401(k) participants who embed a guaranteed lifetime income solution within their target-date fund could see an average 22% increase in spending power compared to a traditional target-date approach. For lower-income workers, the increase reaches 25%. Even higher-income earners can see an 18% improvement.

The logic is straightforward: guaranteed income removes the psychological constraint that causes many retirees to underspend their savings out of fear of running out. When essential expenses are covered by a guaranteed income floor, retirees spend more freely from their remaining portfolio — and that behavioral shift produces meaningfully better retirement outcomes.

Provider	Product	Status
BlackRock	LifePath Paycheck	Active — $25B+ in assets
Vanguard	Target-date with TIAA income	Active
Fidelity	Freedom Lifetime	Announced — 2027 debut
JPMorgan Asset Management	Annuity-embedded TDF	Expanding
TIAA	Secure Income Account	Active — embedded in Vanguard TDFs

The Women’s Retirement Gap

One of the more striking findings in the BlackRock survey involves gender. Women reported higher levels of concern about outliving their savings and generating retirement income than men — yet they are 44% less likely to adopt guaranteed income solutions. The gap is paradoxical: the group most exposed to longevity risk is the least likely to use the tool designed to address it.

The reasons are likely multiple. Women may have less familiarity with annuity products, receive less targeted guidance about guaranteed income options, or face a financial services industry that has historically skewed its communications toward male audiences. Whatever the cause, the data suggests that the conversation about guaranteed income needs to be more deliberately inclusive if it is to reach the people who need it most.

“They’re living longer. Of anyone who would really need that lifetime income, it would be women, yet they’re not asking,” said Magyera.

The Regulatory Tailwind

The rapid expansion of annuity options within 401(k)s has been enabled in part by regulatory changes that reduced the liability concerns that previously kept plan sponsors from offering these products. The SECURE Act of 2019 created a fiduciary safe harbor for employers selecting annuity providers. SECURE 2.0, enacted in 2022, extended those protections. The Department of Labor’s March 2026 proposal would go further, making it easier for employers to add lifetime income strategies — including annuities — to plan menus alongside alternative assets.

A bipartisan bill, the Retirement Simplification and Clarity Act, would allow workers aged 50 and older to roll over 401(k) assets into a qualified annuity while still employed — a move that could meaningfully expand access to guaranteed income outside of plan-embedded structures.

What This Means for Retirement Planning

The BlackRock survey and the Morningstar data together tell a consistent story: demand for guaranteed income in retirement is rising, the industry is responding with new products, and the regulatory environment is becoming more supportive. The gap between what workers say they want — income they cannot outlive — and what most 401(k) plans have historically provided is narrowing.

For workers approaching retirement, the expansion of annuity-embedded target-date funds represents a meaningful new option — one that does not require navigating the retail annuity market independently. For those whose current plan does not yet offer these options, the trend suggests that access will continue to expand. And for anyone evaluating how to structure retirement income, the core question remains the same: how much of your essential spending needs to be guaranteed, and what is the most efficient way to cover it?

Source: BlackRock and Morningstar, via TheStreet. Read the original article.