How clients can avoid 401(k) withdrawal penalties 401(k) participants who make distributions before they reach the age of 59 1/2 face a 10% penalty aside from taxes on the withdrawn amount, according to this article on Forbes. While workers are better off leaving the funds in the plan, they are allowed to make penalty-free withdrawals if they use the money to pay for out-of-pocket medical bills not covered by insurance, or they take what the IRS calls "72(t) distributions." Early 401(k) withdrawals are also not subject to penalty if clients are disabled or are getting a divorce.

Funding 40 years of retirement Studies show that the number of centenarians is increasing, suggesting that more people are likely to have a longer retirement, according to this article on Kiplinger. Clients who expect to live to age 100 can avoid outliving their nest egg by staying invested in equities and creating a pension-like income stream like an annuity. They should also consider working longer so they will be able to delay their Social Security retirement benefits and increase the benefit value.

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