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Mistakes that could stunt 401(k) growth

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Welcome to Retirement Scan, our daily roundup of retirement news your clients may be talking about.

Mistakes that could stunt 401(k) growth
Failing to take advantage of an employer match is one of the biggest mistakes that will prevent 401(k) participants from maximizing the plan, according to this Motley Fool article. These clients also will not maximize the plan if they pick the wrong investments and don’t find ways to minimize the costs. Taking a loan against a 401(k) plan is another mistake that will hinder their savings’ growth.
Gen X needs ‘11 times more’ in savings to secure retirement
Many clients are “somewhat challenged” in securing retirement, as research shows they are not saving enough for their retirement, according to Wells Fargo Asset Management’s Fredrik Axsater in this article from Yahoo Finance. For example, Gen Xers who have only have $66,000 in retirement savings think they should have at least $750,000, an amount which is “11 times more,” Axsater says. “There’s a big mismatch between savings and safety.”

Be on high alert for scams during Medicare open enrollment
Clients shopping for Medicare coverage during open enrollment must be wary of scams, according to this CNBC article. Government data show that the Federal Trade Commission has received nearly 2.4 million reports involving fraud, identity theft and other scams, with total losses amounting to $1.2 billion. To avoid these scams, seniors should not entertain phone calls from strangers asking for personal information. “Sometimes the caller will become stern and demand information, or they may hang up and then call you repeatedly. Don’t fall for it,” an expert says.

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October 30

Why your clients’ retirement portfolios need income growth
Clients should allow their retirement portfolios to continue generating income even after they retire to keep up with inflation, a Forbes contributor writes. That's because inflation could reduce the value of retirement savings and consequently the retirees' purchasing power, he explains. "Use bonds and preferred securities to generate a robust yield, but supplement those holdings with instruments that give you regular pay raises to offset the expected loss of purchasing power."

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