Defined contribution is kind of a poor match to future needs on the recipient's side, though, since people do not live fixed and predictable periods of time. Yo

Defined contribution is kind of a poor match to future needs on the recipient's side, though, since people do not live fixed and predictable periods of time. You could fix this individually by converting the lump sum to an annuity, but few people seem to do so (it doesn't help that the annuity market is a bit confusing). The end result is that people who live significantly longer than expected run out of money. And they do so at the least convenient time: many people early in retirement could probably go back to work if needed, but a typical 100-year-old, who retired 30+ years ago and now ran out of money, is not in a condition to reenter the workforce. In most countries the backstop is to have a small defined-benefit state pension, so they won't end up literally penniless (in the U.S. this is Social Security, which pays a minimum of ~$9,500/yr). Other countries have tried to move more people into essentially buying annuities to mitigate the varying-lifespan risk. For example most defined-contribution private-sector pensions in Denmark now pay into pension funds (third-party, non-profit organizations) that by default are essentially the purchase of an annuity. You can cash it out as a lump sum upon retirement, but if you do nothing, the default is a traditional monthly pension for life, with the amount dependent on your contribution.