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

Over 90% of Americans make this 401(k) mistake
Roughly 92% of 401(k) participants are unaware of the fees they pay in their plans, according to this article on Motley Fool, which cited a study by NerdWallet. This could mean many of them could lose a substantial amount of retirement savings, as many 401(k) plans charge hefty fees. To minimize the cost, clients are advised to review their investments' expense ratios and shift to options with lowest ratios, such as passively managed index funds.

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Adobe Images

Is early retirement great? For some, it’s hard work to have fun
For some people who opted to retire early, the decision turned out to be "jarring," especially if they were accustomed to a busy lifestyle, according to this article on The New York Times. Many of those who retired very early experienced boredom, felt isolated, and had to face awkward social questions. An expert says that people who decided to leave the labor force very early are an anomaly, adding that "the trend is in the other direction.”

There are thousands of Social Security zombies
Many retirees could not have access to their financial accounts and have stopped receiving their health insurance and other benefits after they have accidentally been included in the Social Security Administration's Death Master File, according to this article on MarketWatch. “It’s understandably quite disturbing to a consumer. And it can take months to resolve,” says a consumer advocate.

How to 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participants who make distributions before they reach the age of 59 1/2 face a 10% penalty aside from taxes on the withdrawn amount, according to this article on Forbes.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 Internal Revenue Service calls "72(t) distributions." Early 401(k) withdrawals are also not subject to penalty if clients are disabled or are getting a divorce.

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