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

Mistakes employees often make with retirement savings
Many retirement investors make the mistake of including the stock of their employer in their portfolio, or taking equal amounts of every single investment option within their plans, writes Manisha Thakor, an expert with Buckingham and The BAM Alliance. Writing in The Wall Street Journal, Thakor outlines several common mistakes. For instance, many clients also err in thinking that participating in their workplace retirement plan is not worth it if there is no employer match contribution, while others opt for a default investment option even if it doesn't suit their circumstances, Thakor writes. Then there are clients who do not spend enough time to understand whether a traditional 401(k) or Roth 401(k) plan will be more useful to them, while there are workers who fail to consider the tax advantages of taking part in a deferred compensation program, Thakor says.--The Wall Street Journal

How retirement plans vastly underestimate inflation
Most people who engage in retirement planning make the mistake of using the default inflation rate of 3%, according to this article on MarketWatch. It's because the average CPI-U inflation over a 100-year period beginning 1913 is 3.3%, while the average inflation after World War II through 2013 was 3.9%. But the inflation was more than 6% for 20-year periods ending in years between 1981 and 1994.--MarketWatch

Retired baby boomers face emotional adjustments
Most baby boomers who retired in the last five years and own at least $100,000 in investable assets claimed to have a hard time coping emotionally during the early years of retirement, according to a survey commissioned by Ameriprise Financial. Thirty-seven percent of the respondents had been missing the daily interactions with colleagues, while 32% found it difficult to adjust to a new and different routine, the survey shows. The results also show that 22% had difficulty finding a sense of meaning and purpose to their daily life.  --USA Today

Are you investing in too many funds?
Although retirement investors need to maintain a well-diversified retirement portfolio, investing in 17 funds can be a riskier move since it will make the portfolio difficult to manage, according to this article on CNNMoney. Investors can invest in just two to three broad index funds and get all the sectors of the stock and bond markets at the same time, while a target-date retirement fund is another strategy to have diversified portfolio.  --CNNMoney

The new world of saving and investing for retirement
A new book on retirement states that unlike the previous generations, present-day workers can no longer retire in their 60s and have a comfortable retirement, according to this article on Forbes. The book asserts that this is the outcome of a number of factors, such as longer life span, the use of defined-contributions benefit plans in lieu of defined-benefit plans, the decline in Social Security's income replacement rate, and rising health-care costs. Less than 50% of people are financially ready to retire at age 65, so the book says workers should start saving earlier and boost their savings rate to build an adequate nest egg.  --Forbes

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