A tool for guaranteed income may be coming to your 401(k)—here's what you need to know

Mutual fund companies are increasing access to a type of investment that provides guaranteed income for life.

Last week, mutual fund firm and index investing pioneer Vanguard announced a new line of target-date mutual funds, which will allow shareholders to use some of their retirement savings to buy an annuity, an instrument sold by insurance companies that guarantees the policy holder a certain amount of regular income over a set period of time.

The mutual funds are expected to be available in 2026, the Wall Street Journal reports, and will only be available within defined-contribution plans, such as 401(k)s.

Vanguard joins other financial and insurance firms, including mutual and exchange-traded fund giant BlackRock, in offering funds with a built-in annuity option.

“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,” Lauren Valente, managing director and head of Vanguard Workplace Solutions, said in a statement.