Americans Want Their 401(k) Plans to Change
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Americans are looking for options beyond the traditional 401(k) for funding their retirement, a new survey has found.
A PlanAdviser poll conducted in May among 2,153 401(k) plan holders showed a growing concern among American workers: Their 401(k) plans may not be enough to carry them through retirement.
An overwhelming 93 percent said it was important to have the option to convert their savings into guaranteed monthly income, and 67 percent said they would feel more confident about retirement if their plan included that option.
The results are consistent with other research that shows the American retirement landscape is due a change. A plethora of studies and polls have found that U.S. workers are becoming increasingly concerned about their ability to see themselves financially through their post-working years.
A recent study by Transamerica Center for Retirement Studies found that almost seven in 10 workers—69 percent—said they could work until retirement age and still not save enough to meet their needs. The Allianz 2025 Annual Retirement Study found that 64 percent of Americans were more scared of running out of money in retirement than they were of dying.
The stress of wondering how they will fare financially later in life is fueling Americans' growing interest in guaranteed income. For many, a 401(k) account balance, even one that looks substantial, is no longer reassuring in an economy marked by volatility and inflation.
A composite image created by Newsweek.
A composite image created by Newsweek.
Photo-illustration by Newsweek/Getty/Canva
While a 401(k) allows a plan holder to invest over time and make withdrawals in retirement, it is a far cry from the defined pension plans that have dwindled over the past 40 years. Those traditionally provided steady, guaranteed income during retirement. These days, guaranteed income streams often come in the form of annuities, which are plans bought from insurance companies.
"Who wouldn't feel more confident knowing they'll receive a steady check every month for the rest of their life?" Joseph Patrick Roop, the president and CEO at Belmont Capital Advisors, told Newsweek. "The fact that 93 percent of survey participants want the option to convert part of their 401(k) into guaranteed monthly income says it all."
The issue, according to Roop, is largely structural. While 401(k)s give employees freedom and flexibility, they were never designed to provide lifelong income.
"They give employees choices, but they also shift the burden of creating retirement income from the employer to the individual," he said. "That's precisely why employers love 401(k)s. They can contribute a match, but they're off the hook for the long-term promises of a pension."
The SECURE Act and SECURE 2.0 Act, the latter of which expands automatic enrollment in retirement plans, have helped to introduce guaranteed income options into some retirement plans. However, Roop said, "very few employers have adopted them," and that broader flexibility is needed.
"Allow any plan participant to roll over some or all of their 401(k) into an annuity of their choice that provides lifetime income," he continued, adding, "Just because an annuity is included in a company plan doesn't mean it's the right fit for every person in the company."
Aaron Cirksena, the founder and CEO of MDRN Capital, agreed that the desire for guaranteed income is naturally rooted in worries about financial longevity. "Retirees aren't just worried about having enough money. They're worried about when that money will run out," he told Newsweek. "A guaranteed paycheck in retirement mimics the comfort of a salary."
This trend isn't necessarily a rejection of the 401(k) model, but rather a realization that it has limits. "It's less about a lack of faith and more about missing pieces," Cirksena continued. "Most people don't want to ditch their 401(k), but they're realizing it's not a complete solution."
Christina Muller, a licensed workplace mental health expert, suggested that this craving for security goes beyond finances, and that people naturally "crave predictability and stability, and our brains need these for psychological safety."
"The 401(k) system can feel like rolling the dice with your future, adding undue financial stress for some," she told Newsweek. "People want structure and what feels like an 'insurance plan' for their hard-earned money and future."
She added that Gen X, many of whom are nearing retirement after experiencing multiple economic downturns, are especially likely to prioritize safety and consistency in their planning. Almost 60 percent of Gen Z and millennials in the survey said they would be more likely to participate in their workplace retirement plan if guaranteed income options were included.
"Reducing the financial and mental load for later in life will help stave off this 'invisible interest' of stress and uncertainty that compounds over time," she continued.
As inflation and market instability continue to cast doubt on traditional saving strategies, demand for stable, reliable income in retirement is likely to grow.
Cirksena said: "Even folks with solid savings are starting to think, 'What if this doesn't stretch as far as I thought?' That fear is driving the push for income that's stable, reliable, and protected from market swings."
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Los Angeles Times
8 minutes ago
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As much as the system's foes would like it to go away, as long as the rest of us remain vigilant against efforts to 'redefine a relationship between individuals and government' established in 1935, we will be able to celebrate its 100th anniversary 10 years from now, in 2035.
The Hill
8 minutes ago
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Trump's China deal on AI chips prompts significant security concerns
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Nvidia on Tuesday argued the sales will help the U.S. become a technology leader with little risk to either party. 'As both governments recognize, the H20 is not a military product or for government infrastructure,' the company said in a statement. 'China has ample supply of domestic chips to meet its needs. It won't and never has relied on American chips for government operations, just like the U.S. government would not rely on chips from China. Banning the sale of H20 in China would only harm U.S. economic and technology leadership with zero national security benefit.' Peter Harrell, a nonresident fellow at the Carnegie Endowment for International Peace, said the export control licenses Trump is now negotiating with companies were expressly designed to weigh those types of national security risks. 'It's a very troubling precedent because historically when we've been looking at export control licenses, it's been strictly speaking a national security review,' Harrell said. 'Does the export of this widget threaten U.S. national security? Whereas now, there's also going to be this factor of, 'Well maybe it does threaten U.S. national security … but hey, we got some money from it.'' 'I think it would be quite negative for us if we get in the business of 'We're happy to arm our adversaries as long as they pay us a bit of money to do so.' I hope that's not where we are. I do worry that this could become a broader precedent.' White House press secretary Karoline Leavitt said Tuesday that the administration would consider other similar arrangements in spite of legal concerns. 'Right now, it stands with these two companies. Perhaps it could expand in the future to other companies,' Leavitt said. 'I think it's a creative idea and solution. The legality of it, the mechanics of it is still being ironed out by the Department of Commerce.' 'This was another idea of the president and his brain trust on his trade team to try to get good deals for the American people and the American taxpayer,' she added. It's not clear such deals would be legal. Export taxes are barred by the Constitution, while fees for export licenses are prohibited under federal law. However, it's unclear whether the 15 percent cut from Nvidia and AMD's chip sales would count as a formal tax or fee, as well as whether anyone would bring such a challenge. Still, several raised concerns about the precedent set by the deal, noting there are many other American-made products China would be interested in purchasing that could be detrimental to U.S. interests. 'Are we now going to see the Commerce Department shaking down high-tech exporters generally for a 15 percent cut? Are we going to see the State Department, which regulates exports of defense weaponry, start shaking down defense exporters for a 15 percent cut?' Harrell asked. 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Tobin, however, said China is likely to set their sights on securing more advanced chips than the H20, including the Blackwell, which is still under development. Trump suggested Monday that he would consider making a deal on a reduced-capacity version of the Blackwell. Trump's dealmaking, Tobin said, will suggest to the Chinese that such things are now open to negotiation, a dynamic she warns the government is also using with Nvidia. China's warning not to immediately order Nvidia's chips serves a twofold purpose, she said, one that allows them to exert some control over the company while opening the door to demanding information about the chips that could aid in their replication. 'They know there are technical means that could potentially be weaponized,' she said, adding that while China has 'rational' security concerns, the move is also 'a pretext for squeezing out more from Nvidia' by a country that has previously required companies to share their intellectual property. 'The Chinese government has already been calling Nvidia in to explain whether its chips are secure, and that's a way to put Nvidia on notice and say, 'Hey, you better be behaving the way we want you to, or else we're going to make it very painful for you to stay in the China market.'' Nvidia has previously said it would not send 'any [graphics processing unit] designs to China to be modified to comply with export controls.' 'Our products are extraordinarily complex and take tens of thousands of engineering years to create, and by the time an NVIDIA product is available in the market, we are already far along in our design of the next one,' a spokesperson said Tuesday. Any Chinese advances may mean the deal may only be of short-term value to Nvidia, Tobin argued, but it's one she said the government should shield against. 'The role of government is to put the guardrails on so that private interests don't control our national security,' Tobin said.
USA Today
8 minutes ago
- USA Today
The IRS has had six leaders in 2025. What that means for taxpayers.
Turnover at the top of IRS means fewer IRS agents, fewer audits and questions about implementing the new tax law The IRS is on its seventh commissioner of the year, has lost one-quarter of its staff and is faced with implementing a raft of new regulations. Whether and how this turmoil could affect Americans remains to be seen. But the first impacts are likely to be lower tax collections and a harder time getting answers to tax-related questions, according to a former commissioner and a policy analyst. 'You can be fairly confident of the direction of the impact, that having this level of instability is not good for IRS' core functions and for taxpayer service," said Alex Muresianu, Senior Policy Analyst at the Tax Foundation, a tax policy think tank. 'This level of instability coinciding with the implementation of a new set of tax laws ‒ that is a dangerous mix." The IRS got its seventh leader of the year Aug. 8 when President Donald Trump tapped Treasury Secretary Scott Bessent as its temporary head, after removing Commissioner Billy Long. Trump ousted Long after 53 days on the job, giving him the shortest tenure of any Senate-approved IRS Commissioner. The IRS media office referred USA TODAY to the Treasury Department, which did not return a request for comment Aug. 12. Long, who said he will be nominated as ambassador to Iceland, was the fifth person picked by Trump to lead the agency since regaining the Oval office in 2025, but the only one approved by the Senate. Biden's IRS Commissioner Danny Werfel resigned his five-year position three years early in January, rather than be fired by Trump. New priorities with each new leader Each IRS commissioner sets priorities, moves resources and staff around and problem solves differently, Werfel told USA TODAY. Constant flux over the last 8 months has likely made it difficult for staff to function, he said. The IRS Commissioner's job is to make sure the agency runs well. Werfel compared it to keeping trains on time. "Every time you have a new leader these rules and processes can change," he said. "It just sows confusion." CNN and The Washington Post reported that Long was fired after the IRS clashed with the White House over using tax data to help locate suspected undocumented immigrants. Long, a former Republican Congressman and auctioneer, previously had to walk back plans to start tax season later and eliminate the IRS' free tax filing program. Fewer agents to process returns and answer taxpayer questions The Biden administration added nearly $80 billion in new IRS funding, largely to collect unpaid taxes from the wealthy. That money brought the agency to one of its highest staffing levels just before Trump took office. The new administration almost immediately began mass layoffs and offered early retirements for federal employees, in an effort to downsize the government. A quarter of the IRS staff had left the agency as of mid- July, according to the Treasury Inspector General for Tax Administration. Among the hardest hit positions are people responsible for reviewing and processing federal tax returns, and agents, who conduct individual and business audits. Other fired workers were involved in modernizing IRS technology or helping taxpayers by telephone. Werfel said the staffing cuts will impact customer service unless those people's jobs have been replaced by technology, and he said there is no indication they have been. Contact with the IRS is stressful for most taxpayers, Werfel said. Fewer employees means fewer people answering phones and responding to requests for help, fewer available inperson appointments and longer waits for audit results, he said. "The higher functioning IRS you have, the less stressful this is," he said. "If you're going to engage that bureacracy, you want it to at least work." Fewer audits means less revenue Conducting fewer audits means the country is collecting less revenue, which Werfel said should bother Americans worried about the national debt. "We should want our country to be fiscally responsible," he said. "The more money that we leave on the table that is actually owed to the country, the more that we have to put on the credit card at a high interest rate." For every dollar spent auditing America's highest earners, for example, the IRS reaps more than $4 in recovered tax dollars, research shows. Werfel said there is an estimated $700 billion in taxes that are owed each year but not paid, an amount he said could climb if the risk of an audit drops and there is less pressure to pay. "It creates an incentive for more people to break the rules and that means less revenue," he said. Implementing the GOP tax law The IRS and Treasury Department are rushing to stand up Republicans' new tax law. Lawmakers left it up to the agencies to fill in the details of the policy changes, many of which take effect this tax year, including sorting out specifics of how new breaks for overtime pay, tips and other provisions will work. Muresianu, the tax analyst, said taxpayers often need more clarification from the IRS when new tax laws take effect, and the call volume will likely be higher next year. 'If you have instability at the IRS, management problems at the IRS, and their ability to provide service declines, that is particularly bad if it's coming at a time where there a lot of people looking for clarity,' he said.
