Your Employer

Your employer is likely to provide you, as part of your employment agreement, with an array of benefits, including some form of a pension, either a defined benefit (the company pays primarily based on accumulated earnings over years of service, etc.), or a defined contribution ( pension like a 401(k) (you make regular contributions). A defined benefit pension, in most cases, operates and performs similar to an annuity, providing you with a monthly income distribution until the end of your life. A defined contribution (DC) pension has flexibility in products, often chosen by the employer, to provide you with a variety of ways to invest your money according to your preferences and risk tolerance. Mutual funds are probably the most commonly used product within a defined contribution pension.  Annuities are gaining more attention and acceptance as a product within a 401(k). If your employer’s DC plan does not offer an annuity selection, you should visit with your human resources department and/or employee benefit specialist to determine if an annuity option may be possible.