Our daily roundup of retirement news your clients may be thinking about.

The average 401(k) account holds $96,000. How does yours stack up?
A study by Vanguard found that the average 401(k) balance dropped to $96,288 in 2015 from $102,682 recorded in 2014, with the median balance dwindling to $26,405 last year from $29,603 the prior year, according to this article on Money. The decline could be attributed to poor market returns and the plans' auto enrollment feature, the study found. “As the effects of auto-enrollment kick in, there are more small balances,” says one of the researchers. –Money

Image: Bloomberg
Image: Bloomberg

A simple recipe for the 50-year investor
A study by Willis Towers Watson found that more people are willing to work longer if they think their nest egg would not be enough to cover their costs through retirement. Based on the formula for replacement income, clients need to retire with $780,000 in their nest egg, which means that with the help of compounding, they will need to invest $16,500 annually for 50 years to amass that wealth by the time they retire. To help young people build their nest egg, they should be allowed to invest in an IRA aside from their company's 401(k) plan while their employer should increase their 401(k) match contributions. –Bloomberg

5 health reasons millennials should start thinking about retirement early
Health expenses could be hefty in retirement, so young people are advised to start preparing for this cost as early as they can, according to Huffington Post. Saving early for health costs in retirement is a smart move because financial woes could prompt Social Security to reduce future retirement benefits, while drug price increases remain unabated. Health care costs also might not be included in their insurance policy and Medicare coverage comes with a cost. They cannot rely on working in retirement to get extra earnings since finding a job could be difficult in retirement. –Huffington Post

The truth about retiring by 70
Studies show that many seniors opt to continue working past their retirement age and retire only at 70 because they have not saved enough to secure their golden years, according to this article on CNBC. The trend could be attributed to gradual disappearance of defined benefit plans enjoyed by the earlier generation of workers. "Defined benefit plans have taken on a new shape, with hybrid and cash balance plans. They don't have such rich subsidies any longer," says an expert. –CNBC

Here’s how to get more people to delay claiming Social Security
Seniors are more likely to delay their Social Security retirement benefits if the delayed retirement credit would be replaced by a partial lump-sum payment, according to a study. The proposed approach would mean no cost to Social Security since it would not result in any solvency issues and there would be no wealth transfers involved, writes the researcher. –MarketWatch

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