Answer
A radius at the bottom of the retaining ring groove is often necessary to reduce the stress concentration factor $K_t$ in the shaft or housing. However, if the radius $R$ is too large, it can cause the retaining ring to 'ramp' out of the groove under thrust load. The rule of thumb is that the radius should not exceed $10\%$ of the groove depth $d$. If a larger radius is required for fatigue strength of the shaft, a 'Square-Edged' shim must be placed between the ring and the radius to provide a flat mating surface.