So some companies in the US are offering 401K plans that actually come with Monthly checks according to the Wall Street Journal the offered plan turns a Portion of retirement savings into fixed Lifetime payments through Target date Funds that are embedded with annuities If you want to understand what that Means more specifically here in studio 57 with me is Javier deid he's a CBS News contributor and the managing editor Of business and markets at at axios so Javier you and I have been talking about This when I hear it what it sounds like Is an old school pension so walk us Through how exactly this works so that's Basically the best way to think about it It is a Define benefit program it Basically guarantees you a check in Retirement after a certain age um it's Like a paycheck and so in fact um Black Rock calls it life path it's it's just You think about it the best way to think About it is a way to receive money every Week every month whatever um but you Don't have to sort of freak out about How much you have like retirement Accounts they're you know they're Actually quite useful but um it's a big Lump suum that you get the end when You're ready to retire what have you um And this nobody knows how long you can Take so this precisely and so this Speaks to sort of the anxiety that we're
Having as a public people are either in Retirement and they're realizing that The money that they have saved just Doesn't stretch nearly enough if you're You know relying exclusively on Social Security God forbid that money doesn't Go nearly as much as it should and People that aren't yet quite at Retirement are a little getting anxious Because they see all of this happening And they see prices rising and they all Start asking themselves how do we sort Of make it all work when we're not Working when we not we're not entirely Sure about how much we're going to have And this is all of a piece with Larry Thinkink the CEO Black Rock who has Spoken very eloquently lately about the Retirement crisis so you know all of This means that you know we're living in A time where people are anxious prices Are rising uh and there's a real fear That when you get to a certain age in Your golden years where you're supposed To be sort of enjoying life and not Really necessarily thinking about it uh Money just is still a concern so is this Going to be something it sounds like This is going to be something that's Going to impact you me potentially other People who are still working but not the Silver tsunami that's coming in now that Are now looking at retirement and the Tsunam are really yeah the tsunami is
The best really good way to put it Because it's a lot of people that are Retiring and a lot of them are going to To be faced with a real unpleasant Surprise about how much they have vcv How much they're going to need so we Used to have pensions that made way to 401ks and now it's sort of this hybrid 401K pension system do you expect that This is going to become the standard It's it's very limited we should say Right now very so Black Rock has one Company that is dedicated to doing it Right now and they have about 12 or 13 Others that are signed up for it I think A total of 500,000 people are going to Have this benefit it'll be uh offered Like around 55 um so you know that means that like You know you have a small buyin but like You the pensions fell out of favor Because they just are very difficult to Make work at scale they're very Expensive the Auto industry last year When we were having all of these Discussions about UAW and them Organizing in certain places this was Kind of the subtext of that they want to Bring pensions back because they do feel Like it's just much more generous for People who who you know are again Freaked out about retirement and trying To make it all work and making the Numbers work uh but it's very very
Difficult it's challenging companies Don't you know again fell away that this Thing fell away out of favor because uh People were just finding it was just too Expensive yeah and make it easy and make It work for people jaier thank you Absolutely
