Target Date Fund + Annuity!

Your 401k is about to start paying you a pension. Confused? Let me explain. A pension is the most beloved retirement benefit ever created. Unfortunately, most Americans don't have it anymore. But in 2026, things are starting to change. Fidelity and Vanguard are bringing something surprisingly close to a pension inside your 401k's. Target date funds represent the default investment in millions of American retirement accounts. And now many of them are going to come built in with an annuity option. So, starting at age 55, a portion of your target date fund will start buying into an annuity plan, and by the age 65, essentially 25% of your entire target date fund is now invested in this annuity plan. Subscribe to Money Matters MD for more interesting personal finance content.