Treasury Department Encourages Lifetime Income Options

In a push to make sure Americans don’t outlive their retirement savings, the Treasury Department has released several new guidance documents encouraging plan sponsors to offer so-called “lifetime income” options.

Under the new guidance, it will be easier for employers to offer employees an option to use part of their 401(k) savings to purchase a “deeply deferred annuity.”

Employees would have the option to use up to 25% of their account value (or $100,000 maximum) to purchase an annuity that would begin paying at age 80 or 85 and guarantee income for the rest of their lives.

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