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

Watch out for these sneaky leaks in your retirement savings
Retirement savers can lose up to 25% of their retirement savings accounts from leakages, or pre-retirement withdrawals that "permanently remove money from retirement savings accounts," according to a new report from Boston College's Center for Retirement Research. These leakages include in-service withdrawals, cash-outs and loans. These losses can be minimized if the cash-out option is scrapped, hardship withdrawals are allowed only for unpredictable events, and the age for penalty-free withdrawals is raised above 59-and-a-half, the report says.  --MarketWatch

Beware of in-service 401(k) rollovers
Retirement investors need to weigh their options before doing an in-service 401(k) rollover because of the hefty fees they will pay, writes Jamie Cox, managing partner of Harris Financial Group. Such a rollover also may not be a good idea because penalty-free withdrawals will not be allowed at 55 and there are no loans on IRA assets, Cox argues. "Over the years, I have seen many situations where in-service rollovers were made to the detriment of the plan participant.  Whatever you do, avoid an in-service rollover until you have fully considered the consequences."  --The Wall Street Journal

Are your clients on track to be 401(k) millionaires?
The number of workers with at least $1 million in 401(k) assets increased to 72,379 from 34,920 two years ago, according to a recent report from Fidelity Investments. This threshold may seem daunting to clients, but remind them that the average age of a 401(k) millionaire is 60 so they've had a career’s worth of saving money. Moreover, clients could be on track to join their ranks if they consistently save 15% of their pay as a first step. Indeed, good savings habits enabled these newly minted millionaire workers to contribute $21,400 on average to their plans, with 72% of their accounts invested in stocks. Clients who have $90,000 in their 401(k) at age 40 or $350,000 by age 50 are likely on track to hold $1 million in their plans by the time they retire.  --Time Money

11 common Medicare mistakes
Some clients make the mistakes of keeping their Part D plan choice on autopilot and readily purchasing the same Part D plan as their spouse, according to this article on Kiplinger. Failing to ensure that the plan covers their preferred doctors, hospitals and other providers is another mistake that other clients make. Some clients also don't know that switching Medicare Advantage plans after open enrollment is not possible, while others have not chosen the right medigap plan when they first enrolled.  --Kiplinger

5 harmful retirement misconceptions to avoid
Treating retirement as a 30-year vacation is one of the misconceptions that people should avoid, according to this article on Forbes. Some clients should also stop thinking that money is what matters most to achieve happiness in retirement, and that retirement spending is constant. People should realize that retirement is not only for couples and financial planning does not end when they start spending their golden years. --Forbes

Read more:


Register or login for access to this item and much more

All Bank Investment Consultant content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access