Less than 35 percent believe they're stashing away enough to last for their retirement. Peter Velardi, president and chief operating officer of FiPath, an independent financial planning site, says the proposed 401(k) annuity option addresses two concerns: people living longer and the vast retirement savings lost since 2008. Guarantee vs. Control But consumers must be sure they understand the trade-offs and risks, says Velardi. "It feels like a pension, but the big difference now is consumers are taking responsibility for it," he says. "I wouldn't say everybody should do it, but it could be a very good idea for some." While the annuity is an opportunity for guaranteed lifetime income, the trade-off is a loss of control and liquidity as well as the loss of potential upside from keeping the money invested in the markets, he says. For instance, the funds signed over to an annuity couldn't be tapped to cover unexpected health care needs. "You need to be self aware about what your spending habits are and your health and filter that in," says Velardi. "It isn't always the best idea if you don't have enough cash reserves." For those choosing the annuity option, financial advisers recommend a tiered approach, with a portion in an annuity -- the most conservative investment option -- another bucket that is safe, but more liquid with an opportunity to get a higher-than-fixed return and a separate rainy-day fund. While pension-style, lifetime payouts were once the norm in the United States, the private pension system has steadily shifted toward single-sum cash payments. According to the Treasury, of the $11.2 trillion in private- pension assets tallied last year, only 21 percent was held in defined benefit plans. Employee contribution plans like 401(k)s accounted for 36 percent and individual retirement accounts (IRAs) were 43 percent. The government notes that a 65-year-old woman now has a 50 percent chance of living past age 86, and a 65-year-old man has the same odds to live past age 84, increasing the possibility that Americans might burn through their savings.