Retirement plans call for flexibility

May 09, 2011

Flexible retirement plans allow seniors to leave their options open

In today's economy, workers planning for retirement need to think out of the rigid confines of traditional retirement planning, said one expert.

In her personal finance column for Reuters, Linda Stern said retirees need to provide themselves a backup plan that can protect them should their retirement plans not go as they expected. Some workers are being laid off sooner than they counted on, forcing them into a stage of life where they don't have the income to support themselves. In these times, a second job or emergency account backed by a life insurance policy could be the difference between staying afloat and financial ruin.

Additionally, Stern recommended workers keep their money and investments in a diverse number of accounts. If everything's in a 401(k), it's all subject to tax penalties upon withdrawal, so Stern suggests putting some money in several different accounts, including a Roth IRA, a taxable account and even some stocks.

With interest rates dwindling, many seniors are noticing much less in their savings account than they expected, raising the importance of a good life insurance policy, experts say.

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