While the introduction of Qualified Default Investment Alternatives (QDIA) to defined contribution plans has enabled sponsors to help participants accumulate retirement savings, a new study released by Richmond, Virginia-based Genworth Financial during the company’s 2008 Retirement Symposium in May has revealed that adding guaranteed income to a QDIA offers even greater upside to individuals. Guaranteed income, Genworth says, can help to avert the risk of ruin for participants and help them generate even higher income levels in retirement.
According to the study, the addition of guaranteed income products allows 401(k) participants to benefit from strong financial markets, while also offering protection against periods of poor market returns. Additionally, with increasing retirement expenses and longer life spans, participants can lock in the certainty of having a source of guaranteed lifetime income.