Transforming your 401(k) into steady income

A job and a paycheck – they go together like coffee and cream. But when you retire from your regular job, does that mean you have to give up the cream?

A growing number of 401(k) plans are including investment choices that can help savers convert nest eggs into retirement income. Participants can buy insurance annuities or other products designed to spread funds over a lifetime.

These programs aim to make 401(k)s more like traditional pensions. That’s laudable if it helps retirees cope with “longevity risk” – that is, the risk of exhausting savings in a retirement of unpredictable length.

But the new retirement income initiatives have disadvantages too, so savers should proceed carefully. Here are some points to consider if one of them shows up in a 401(k) plan near you.