Plans must provide an annual estimate of retirement income
While it’s helpful to receive your account balance, investment holdings and fees deducted from your account on a quarterly basis if you contribute to a 401(k), these numbers aren’t all that helpful. Contributors typically want to know how their contributions will translate into a monthly income during retirement. Thankfully, some plans supply this information, but there isn’t much you can do if yours doesn’t.
That’s all about to change thanks to the SECURE Act. Participants will be provided with information on their future monthly income on an annual basis.
If this sounds familiar it’s because pensions used to provide this service as well. Seniors would have received projections of their retirement income if they stayed with a certain company until they reached their golden years. We think it’s about time this practice was carried over to 401(k) plans!
