401(k) Plans Are Already Putting Real Money Into Annuities
401(k) Plans Are Already Putting Real Money Into Annuities
In-plan target-date funds with a built-in annuity now hold $44 billion in assets. One fund alone nearly tripled in 18 months.
The forecasts said annuities were coming to 401(k)s. The numbers say they arrived.
For years, industry groups predicted guaranteed income would eventually show up inside employer retirement plans. Regulatory changes made it easier for plan sponsors to add annuities without taking on excess fiduciary risk.
Most of the coverage stayed hypothetical. Real dollars are now confirming the shift, and the numbers are large enough that they are hard to dismiss as a niche experiment.
$44 billion, and one fund driving most of it
Target-date strategies with a built-in annuity component held $44 billion in assets as of the first quarter of 2026.
A meaningful share of that growth traces back to one product. BlackRock's LifePath Paycheck fund grew from $9 billion to more than $25 billion between mid-2024 and late 2025.
That is not projected growth. It is money current 401(k) participants are already allocating, often through a plan's default investment option rather than an active choice.
For a category that spent years as a forecast in industry reports, this is the first sign the money is actually moving.
Figures reflect industry-reported asset data as of Q1 2026 (Center for Retirement Research). Fund performance and asset levels change over time.
Where you stand, and what to do about it
- Adoption is still early. Most 401(k) menus do not include an annuity option yet.
- Total in-plan annuity assets remain a small fraction of the roughly $4.8 trillion held in target-date funds overall.
- The direction is clear, but most savers cannot rely on their employer to solve this today.
- A fixed annuity purchased directly, outside a workplace plan, accomplishes the same core goal: income that cannot be outlived.
- It works whether the money sits in an IRA, a taxable account, or funds rolled out of a former employer's plan.
- You do not need to wait for your employer to add the option.
- Ask your plan administrator directly whether the target-date fund or any core menu option includes an annuity component.
- If it does, ask what it costs and how the income feature works if selected.
- Not every target-date fund with "income" in the name includes a true guaranteed lifetime benefit.
Common questions
1What is an in-plan annuity in a 401(k)?▼
2Do most 401(k) plans offer this yet?▼
3Is BlackRock's LifePath Paycheck the same as buying an annuity directly?▼
4If my employer does not offer an in-plan annuity, what are my options?▼
5Does adding an annuity to a 401(k) increase fees?▼
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