Employers can help employees manage their savings after they retire by offering investment options instead of a lump-sum payout, an analysis by Mercer says.
The human resources consulting firm used data from the Stanford Center on Longevity and the Society of Actuaries to examine three options for managing retirement income: systematic withdrawals, immediate annuities and hybrid products.
Mercer said each was better for employees than giving them a lump-sum upon retirement. That's because most people are not equipped to invest their funds or withdraw them in a way that allows them to maintain their lifestyle while preserving principal.
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