Marking its first new target-date addition in two decades, Vanguard’s new CITs offer 401(k) participants another option in the growing market of in-plan annuities.
Vanguard is adding an annuity twist to its dominant target-date franchise, teaming up with TIAA on a new collective investment trust series aimed at making lifetime income more accessible in 401(k) and other workplace plans.
The Target Retirement Lifetime Income Trusts will incorporate the TIAA Secure Income Account as a guaranteed income option within Vanguard’s target-date structure. The new series is designed for employer-sponsored defined-contribution plans and is scheduled to roll out with product design and availability updates through 2026, according to an announcement from the firms on Wednesday.
“Retirement isn’t one-size-fits-all, and for those who want more predictability, guaranteed income can provide added peace of mind alongside their savings,” said Lauren Valente, managing director and head of Vanguard Workplace Solutions. “In working with TIAA, another mission-driven organization, we’re giving participants an option to turn a portion of their savings into income they can count on for life.”
The market for guaranteed income within workplace retirement plans got a boost in August, with an executive order from Donald Trump directing the SEC and Labor Department to review their stances on the inclusion of alternatives in 401(k) plans, including ” lifetime income investment strategies.” Days after, the DOL withdrew a final rule that would have gotten rid of a long-standing safe harbor for fiduciaries to select annuity providers in workplace retirement plans.
Vanguard’s launch on Wednesday marks its first new target-date series since 2003 and comes as lifetime income options slowly gain traction inside qualified plans.
In a commentary published Wednesday, Morningstar noted that Vanguard’s flagship Target Retirement funds already account for more than one-third of the over $4 trillion invested in target-date funds, underscoring the potential impact of adding an annuity-focused sibling.
The Target Retirement Lifetime Income series will track the same glide path as the flagship funds until age 55, at which point it begins allocating to the TIAA Secure Income Account, a savings annuity that accumulates over time and can later be converted into a stream of lifetime payments backed by TIAA. By age 65, the annuity sleeve is expected to reach 25% of the portfolio, and participants can decide whether to convert that portion into guaranteed income.
The Vanguard–TIAA effort follows other attempts to marry target-date funds with in-plan annuities. BlackRock’s LifePath Paycheck, launched last year, has grown from $9 billion in assets in May 2024 to $25.7 billion by October 2025, while assets in other target-date funds offering annuity options have more than doubled, from $1.4 billion to $3 billion over the same period, according to Morningstar.
Annuities have long carried a reputation for complexity and opaque fees, which has made both advisors and plan sponsors cautious about broader adoption. Providers are pitching embedded annuities in target-date structures as a way to streamline implementation, clarify costs and help retirees manage sequence-of-returns risk in the early years of retirement.
“Lifetime income is in TIAA’s DNA – the company was founded in 1918 by Andrew Carnegie specifically to provide guaranteed lifetime income to American workers,” said Colbert Narcisse, chief product officer and head of insurance solutions and new markets at TIAA. He said the collaboration is meant to give plan sponsors “a low-cost, more secure path to and through retirement.”
TIAA president and chief executive Thasunda Brown Duckett framed the partnership as an effort to “[return] the promise of guaranteed income for life to millions of Americans who believed that kind of security was gone forever.”
Nonetheless, there’s still a long runway to adoption within the in-plan annuity space, where lack of awareness and knowledge remains a sticky wicket. A November survey from LIMRA found just 14% of consumers working with a financial professional profess a strong understanding of annuities. In the still-novel market of in-plan annuities, providers likely have an even wider gap to bridge.
“Adoption will likely remain gradual because of education and engagement challenges, but Vanguard’s entry could accelerate interest in these strategies,” Morningstar noted. “Whether they ultimately improve retirement outcomes for investors, however, remains uncertain.”
