Hourly and salaried employees at Ford Motor Co. and elsewhere are hearing more these days about how to turn some of their 401(k) savings into a “paycheck for life.”
It’s a unique concept where employers — and all of the Detroit Three automakers are now doing this — provide access to a platform called Income Solutions that enables workers to comparison shop for annuity quotes from a variety of insurance providers.
The individual is in the driver’s seat. The employee decides what road to take, how much money they’d like to put into a fixed income annuity, whether this is the right move for their family, and what annuity options to choose.
It’s not an all-or-nothing option. Some money can stay in the 401(k) and some can be put in an annuity, based on what the employee wants. No money has to go into an annuity at all, if that’s the preference.
Even if you’re able to build a decent nest egg for retirement, the next big challenge is figuring out how to stretch your savings over a lifetime and provide enough income each month to cover your bills and then some.
How the 2023 UAW came into play
Demands during the UAW contract negotiations in 2023 at the Detroit Three automakers reflected the retirement angst many working people face today and called for bringing back traditional pensions for those autoworkers who were hired after the fall of 2007 and not covered by pensions.
A traditional pension — which provides a steady monthly check — after all was the original “paycheck for life.”
Costly pensions did not return in the UAW contracts, even after the historic “Stand Up Strike,” as most experts predicted would be the case back in 2023. The automakers did agree to juice up some 401(k) contributions.
The UAW contracts at the three automakers all included a significant boost in the automatic employer contribution to 401(k) plans — with no required employee contribution — for eligible UAW members who are not covered by pensions. The Detroit Three employers agreed to contribute 10% of base pay for these eligible hourly workers. That’s up from 6.4% for those hired after the fall of 2007.
And, as I reported in a column in early 2024, the new auto contracts at each automaker quietly opened the door for a way for autoworkers to opt to set aside a chunk of their 401(k) savings into a lower cost annuity designed to offer a more predictable stream of income in retirement. It’s a new type of idea that has been discussed in retirement circles but one that often is not a topic of conversation among everyday savers.
How Ford is building buzz about a new annuity-related option
After launching in January, Ford featured its new annuity-related option in a June 30 “From the Road” blog, noting that Ford 401(k) participants in the United States “who want a guaranteed income stream in retirement now have an easier way to lock in the certainty of a pension with more control.”
At Ford, some 87,000 U.S. employees have a retirement savings plan. And the Dearborn-based automaker says the new annuity marketplace offers another option where employees can choose what works best for them.
“We want to help Ford employees support their families today and in retirement,” Ford spokeswoman Jessica Enoch told the Detroit Free Press.
“It’s about providing flexibility and choice in their retirement planning. For Ford 401(k) participants in the U.S. who want a guaranteed income stream in retirement, this gives them an easier way to lock in that steady stream of income with more control.”
She noted that Ford has been educating employees about the new option since early in 2026 and the process will continue. Materials are available for employees who want to learn more about annuities. Employees also can set up a free appointment with a specialist to help decide whether an annuity is right for them and their family.
What does Income Solutions do?
Think of the Income Solutions approach as a marketplace for lifetime income annuities.
Kelli Hueler is CEO and founder of Income Solutions, the annuity purchase program of Hueler Investment Services based in Edina, Minnesota, outside of Minneapolis.
Hueler told me in a phone interview that the goal is to offer solid guidance about annuities and like comparisons of products.
The online platform allows plan participants to browse annuity products from several insurance providers, run some models of potential lifetime income payouts, compare payouts offered by select insurance providers and research how an annuity might fit their needs.
Six highly rated annuity providers are on the Hueler platform. They are the Integrity Companies, Lincoln Financial, Mutual of Omaha, Nationwide, Symetra, and Securian. Employees at the Detroit Three, she said, will pay a one-time 1% transaction fee up front if they select an annuity.
As part of the program, employees have a direct internet link from their benefit portal to the Income Solutions platform. Income Solutions doesn’t manufacture any type of annuities, manage assets or provide advice, Hueler said.
Typically, Hueler said, people who want to turn their 401(k) money into a “personal pension” often consider annuitizing 20% to 30% of their savings. People are often encouraged to stay under 50% of total available resources when it comes to allocating money toward an annuity.
“We don’t want them to over-annuitize,” she said. “We want them to have a solid, personal pension.”
Employees would want to take into account all their sources of income in retirement, including outside IRA accounts, Social Security and their 401(k) savings.
The online tool even can be used a few years before retirement as a way to judge how a model strategy might work over time, she said.
Those who are already in retirement, she said, can use the tool and still decide whether they want to annuitize more money in the future. Maybe, she said, they decided they want a little more in monthly income and a little less risk.
All annuities on the Income Solutions platform are designed as IRA annuities, Hueler said. When participants elect to purchase an annuity, it is then a simple one-step process.
Hueler noted that tax statements are provided from the insurer each year as you receive income from the annuity, and those payouts would be treated as taxable income.
Income Solutions is a voluntary program, she said, where individual participants choose whether and or what to purchase. Hueler conducts the issuer selection and oversight. The plan sponsor does not take fiduciary duty over participant decisions or Hueler’s selection of insurers.
Hueler noted that the organization providing access to the service goes through a due diligence process to document the selection of Hueler as an appropriate provider of the Income Solutions platform.
Why annuities are considered as a next step after saving in a 401(k)
Gal Wettstein, associate director of health and insurance at the Center for Retirement Research at Boston College, said more discussions are taking place among many employers, policymakers in Washington and state government about how to help people better prepare so that they don’t outlive their retirement savings, including reviewing annuities as an option.
“It’s a way to re-create pensions for people who don’t have traditional pensions,” Wettstein said.
“They have a 401(k) or something like it from their employer. But that’s not a stream of income, that’s a pile of money.”
A fixed income annuity can offer a way to convert some savings into a stream of income that can last over a lifetime or even over a surviving spouse’s lifetime. You essentially give X amount of money in order to receive Y amount of cash each month over the life of the contract.
A fixed income annuity differs from a variable annuity, which typically is more complex, has more restrictions and often is tied to some kind of market performance.
In many cases, Wettstein said, it can make sense to put some money into a fixed income annuity to make sure you don’t run out of money because you happen to live a long time. Think of it more as insurance, not an investment.
One thought: Such products are meant to protect you against running out of money if you live a long time, he said. As a result, someone who is nearing retirement with a dire health diagnosis who doesn’t expect a long life in retirement typically would not benefit much from annuitizing that savings.
“My caution to the caution is we know from research that people tend to be somewhat pessimistic about how long they’re going to live when they are at the age where they might make these kinds of decisions,” Wettstein said.
He suggests looking at more objective life expectancy tables, such as the Social Security Administration’s life expectancy calculator online.
He discourages people from trying to work through some sort of “break even” analysis to try to figure out how long you’d have to live to make this strategy worthwhile. Think more about figuring out the minimum income you’d need if you do happen to have a long life.
“Like your health insurance. You wouldn’t think ‘How sick do I need to get in order make my health insurance worthwhile?’ ” Wettstein said.
What is an annuity?
Ford noted in its blog that employees can now use the Income Solutions marketplace to convert a portion of their 401(k) into an annuity.
What is an annuity? According to Ford’s explainer, an annuity is a long-term contract between an individual and an insurance company.
“In exchange for part of the individual’s retirement savings,” the Ford blog notes, “the insurance company provides monthly payments that are guaranteed for life or for a set number of years, creating a steady, predictable income stream. Annuities can also be structured to provide continued income to a survivor, like a spouse or partner.”
The process, Ford notes, is designed to “help inform decisions and create greater income security in retirement.”
What’s happening at Stellantis, General Motors
In August 2023, FCA US, which does business as Stellantis North America, rolled out the Income Solutions platform to its U.S. salaried employees who are not represented by the UAW and retirees in that group as a way to enable participants to transfer a lump sum into an annuity to create a stream of income.
The voluntary benefit was added in January 2024 for all UAW members who work at the parent company of Chrysler, Dodge, Jeep, Ram, Fiat and Alfa Romeo after it was negotiated as part of the 2023 contract. Income Solutions is available to all current and former employees, retirees and alumni, who participate in an FCA US-sponsored benefit plan.
General Motors has been offering the Income Solutions platform since 2025 to its hourly and salaried employees as a way for employees to get more information about annuities and compare features of products on the marketplace.
Hueler told me earlier that she was brought to the table by General Motors during UAW contract negotiations in 2023 to help address alternative options for the UAW’s pension demands. The goal was to provide a solution acceptable to all parties regarding access to lifetime income annuities.
Hueler noted people who have a balance in a 401(k) plan over time know how to save but many may be worried about outliving their retirement savings.
Many fear what could happen to their standard of living in retirement, especially when dealing with volatility in the stock market and inflation.
Talk about more options — such as the Income Solutions marketplace being provided at the Detroit Three — could indeed grow into a bigger part of the conversation as more people navigate retirement without a traditional pension.
Contact personal finance columnist Susan Tompor: stompor@freepress.com. Follow her on X @tompor.
This article originally appeared on Detroit Free Press: ‘Paycheck for life’ at Ford, other automakers is real. How it works
Reporting by Susan Tompor, Detroit Free Press / Detroit Free Press
USA TODAY Network via Reuters Connect
By Susan Tompor, Detroit Free Press | USA TODAY Network
