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

Why clients shouldn't rush to buy a rental property
Clients who consider tapping their 401(k) assets to acquire an investment property are advised to fully think through the ramifications, according to this Q&A article in MarketWatch. If a client is asking about a loan from his 401(k) plan in the first place, it's not a good sign since lenders want to see liquidity, not to mention an income high enough to service the debt, pay the property taxes and maintain the property without a renter for some time. Moreover, distributions from the plan can be subject to income tax and a 10% penalty if the person is younger than 59 1/2. Ultimately, the article concludes that the property would have to "perform sensationally" to make up for the hit to the investor's retirement savings. And if they are able to save diligently and accumulate some money, they likely will have a stronger credit profile and be better able to try this investment strategy in the future. --MarketWatch

How to overcome ‘income shocks’ that wreck retirement security
Job loss, sudden illness and other life events can disrupt a client's income flow and hurt their ability to build their savings, putting their retirement prospects in peril, according to a study. Such disruptions are becoming more common at all income levels, although lower-income investors are more susceptible than their wealthier counterparts, the study found. That being the the case, clients might want to consider private wage insurance, according to this article. It is also more important than ever to have an emergency fund that can pay for three months of living expenses. The article also cautions that many lower earners tend to tap their retirement savings when they experience an 'income shock,' further hurting their odds of securing their retirement. --Money

401(k) fees, already low, are heading lower
More companies are reducing their 401(k) plan's investment costs, a trend that is likely to continue in the foreseeable future, according to The Wall Street Journal. 401(k) administrative costs dropped to 10-year low last year, according to consulting firm NEPC. “I see no end in sight,” says an investment consultant. --The Wall Street Journal

How millennials are sabotaging their retirement
Millennial workers tend to change jobs and cash out their 401(k) assets, destroying their momentum of building their retirement nest egg, according to this article on Forbes. Instead of cashing out their 401(k) assets when leaving their employer, young workers are advised to roll these assets, no matter how low the funds are, into the 401(k) plan with their new employer. They may also transfer the assets to an IRA. --Forbes

MONEY TALK: Retirement calculators are a wake-up call
Compared with early baby boomers who can replace 82% of their pre-retirement income, late baby boomers are likely to end up with a replacement income of 59% in retirement, according to a study by Pew Charitable Trust. GenXers are expected to replace only 50% of their income in their golden years, the study found. This can help explain why retirement calculators suggest big retirement savings for these clients. --Los Angeles Times