“The new regulations give people more flexibility,” says Warren Ward, a financial planner in Columbus, Ind. “You could put a third into an annuity and invest the remaining lump sum or keep some cash handy for medical needs and emergencies. It can give people piece of mind, which is important. After you work for your whole life, you don’t want to worry about money when you get to retirement.”
The U.S. Treasury proposal to encourage partial annuity options for 401(k) investors comes as Americans contemplate longer life spans while being spooked by the drop in value of retirement portfolios in the wake of the 2008 financial market meltdown.
A recent survey from global financial services association Limra found that 40 percent of Americans don’t feel well informed about generating retirement income, investing their nest eggs, or managing their risks and expenses.
The survey, cited in a recent edition of Financial Advisor Magazine , also found that less than 50 percent of Americans plan for more than 20 years of retirement.
Only a handful have factored in how they might cover the cost of health care, long-term care, rising taxes and inflation ,and what they might do in the event they outlive their savings.
Less than 35 percent believe they’re stashing away enough to last for their retirement.Page 2 of 5 | Prev Page | Next Page