The government is encouraging employers to offer an old-school, pension-style option for 401(k) holders. The revamp would make it easier for workers to convert part of their 401(k) savings into an annuity that would pay guaranteed income checks for life. A “longevity option” would let 401(k) savers take a lump sum portion at retirement age and defer it for 20 years, so retirees would start getting steady check at age 85 and beyond. “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.” Less than 50% of Americans plan for more than 20 years of retirement, according to LIMRA.

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