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A NEW option for the retirement crowd

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 a 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.”

Source: The Street, LifeHealthPro.com.

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The NEW retirement resorts

Assisted living typically consists of a small apartment with services that may or may not cost extra. An estimated 733,000 people in the U.S. live in an assisted-living facility as of 2010, according to the American Health Care Association’s National Center for Assisted Living. Call them adventurous, call them picky, but some people are venturing outside the stereotypical assisted-living facility. Some options that have received positive reviews: Going abroad for long-term care; building a cottage in a family member’s backyard for the older adult to live; cohousing in a development with a private home, but shared common facilities like a kitchen; and cruise-ship living. Such options come with their fair share of research, legwork and background checks. It could require some negotiation with a long-term-care insurance provider to pay for such alternatives, but newer policies have language about covering “alternative plans of care.”

Source: Wall Street Journal, LifeHealthPro.com

31 million people between the ages of 44 and 70 want “encore” or second careers.
Source: MetLife Foundation’s “Bridging the Gap: Making it Easier to Finance Encore Transitions.”

Less than 50% of Americans plan for more than 20 years of retirement. Source: LIMRA