Key Points Tax considerations with RMDs are especially important. Retirees should also evaluate when the best time is to take their RMDs. Reinvesting RMDs is often a smart move for retirees, but it isn't always the best approach. The $23,760 Social Security bonus most retirees completely overlook › What's the most critical age for retirees after their retirement date? A good case can be made for age 73. Anyone who has money in a tax-deferred retirement account such as a traditional IRA or a 401(k ...

Group 1 - The importance of contributing to a 401(k) for a financially stable retirement is emphasized, highlighting that many individuals rely solely on Social Security, which may not be sufficient [1] - Avoiding common mistakes in 401(k) plans is crucial for maximizing retirement savings, particularly in 2026 [2] Group 2 - Not claiming the full workplace match is a significant mistake; for example, if an employer offers $3,000 in matching dollars and an employee only contributes $2,000, they forfeit $1,000, which could grow substantially over time [3][4] - An investment of $1,000 today at an 8% annual return could potentially grow to nearly $22,000 in 40 years, underscoring the long-term benefits of maximizing employer contributions [5] Group 3 - Ignoring investment fees in 401(k) plans can lead to reduced returns; high fees associated with certain funds, such as target date funds, can significantly impact overall investment performance [6][8]

Core Insights - Retirement planning can be undermined by misconceptions that lead to significant financial losses over time [2] Group 1: Social Security Misconceptions - Claiming Social Security benefits early at age 62 can lock retirees into lower monthly benefits for life, with full retirement age being 67 for those born in 1960 or later [3] - Earning above the income limit while receiving Social Security can result in benefits being stopped, potentially costing retirees between $120,000 and $300,000 over their lifetime [4] Group 2: Withdrawal Strategies - The "4% rule" is a rough estimate and not a strict guideline; retirees should adjust withdrawals based on inflation and market conditions to maintain purchasing power [5] Group 3: Fee Structures in Retirement Plans - Not all retirement plans have the same fee structures; some mutual funds may charge fees of 1% or more, while most 401(k) plans charge around 0.5%, leading to significant differences in long-term investment returns [6]

Retirement Planning - Understanding 401(k) plan operations is crucial for maximizing long-term savings [1] - Lack of knowledge about 401(k) plans could result in significant financial losses over time [1]

10'000 Hours/ Getty Images Ensuring your 401(k) is delivering the best return possible is essential for your retirement. Key Takeaways A new study found that more than half of 401(k) plans from 2009 to 2013 offered consumers at least one investment fund option that shared revenue with the plan's administrator. That means higher hidden costs, which can add up to thousands in lost value by the time you retire. Do you really know how your 401(k) plan is invested? If not, you might be putting your money ...

Retirement Planning - Understanding 401(k) plan operations is crucial for long-term financial well-being [1] - Lack of knowledge about 401(k) plans could result in significant financial losses over time [1]

401(k) Plan - Employers' average maximum match to employees' 401(k) plan is 46% of pay [1] - Many companies offer no matching contribution to employees' 401(k) plan [1]

Core Insights - A clerical error in an employee's hire date led to their payroll system incorrectly categorizing them as a newborn, preventing them from contributing to their 401(k) plan for years [2][3] - The employee, aged 47, repeatedly inquired about their 401(k) contributions but was misinformed that enrollment would occur automatically [2][3] - The situation highlights the importance of employers conducting annual compliance reviews of their 401(k) plans to verify employee eligibility [4] Compliance and Correction - The IRS mandates that if an eligible employee is excluded from contributing to a 401(k), the employer must rectify the situation by making a qualified nonelective contribution [5] - The corrective contribution typically equals 50% of the amount the employee would have deferred, along with any lost earnings and matching contributions that would have been owed [6] - If the error is identified quickly, the IRS may permit a smaller correction under certain safe harbor rules [6] Employee Guidance - Individuals in similar situations are encouraged to be proactive in verifying their 401(k) enrollment and contributions [4][7]

Retirement Savings Accounts - The document highlights the distinction between 401(k) and 457 retirement savings plans [1]

401(k) Plan Updates - 401(k) plans may soon offer more unconventional investment options [1] - Individuals bear the risk if these new options underperform [1]