Have you Selected your Retirement Plan Beneficiaries?

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Have you Selected your Retirement Plan Beneficiaries?

Do you have a retirement plan?

Most individuals will probably answer, “yes.”  They may even answer, “yes,” multiple times, having more than one established retirement account. (1)  Yet, while retirement plans are commonplace, many plan participants have a hard time answering the question:  Who have you selected as your retirement plan beneficiary?

Your account beneficiary is the individual (or individuals) whom you have chosen to inherit those funds.  For some, the naming of beneficiaries may seem obvious (of course I have chosen my spouse or child);  but for others, that may not be the case.

Imagine what would happen if the money in your retirement account went to someone from whom you were estranged?  Or the hurt that may be felt by an important individual in your life, when they find out they were never named as a beneficiary?  This occurs more often than you might think.

What if your sole beneficiary were your spouse and they passed away before you?  Did you remember to add new beneficiaries at that time?

What if you established your retirement plan at a time when you were single, and your only logical beneficiaries were your parents?  Are you sure you remembered to add- or replace your parents with- your spouse and children later in life?

Though all retirement accounts ask you to establish beneficiaries at the time of opening the account, it is rare that your retirement account would require, or even suggest, that you do an annual beneficiary review.  Yet, beneficiary selection is vital to making sure your retirement plan funds go exactly where you want, in the event of your passing.

Build a habit of reviewing your beneficiary information annually for all retirement accounts.  Taking the time to review your beneficiary details today, may help prevent surprises and disappointment later.  Selecting beneficiaries may be one of your biggest estate-planning decisions!  Make sure it is the right one.

Don’t forget — The same way you are carefully selecting beneficiaries; those around you are doing so, too.  And they may choose you to be a beneficiary of theirs!  If or when you inherit another individual’s retirement plan funds, be sure to manage the inherited funds carefully, as they could potentially yield substantial tax consequences. (2)  Need help understanding this more fully?  Your ATLAS Lifestyle Planning Group is here for you.


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This blog is intended for general informational purposes, and should not be taken as strategy or advice by ATLAS Lifestyle Planning Group (ATLAS LPG).  ATLAS LPG encourages all individuals to consult their financial professional about these or other matters which concern their personal finances or financial strategy.  If you do not have a financial advisor, or feel you may benefit from seeking the advice of a different financial advisor, please do not hesitate to reach out directly to your ATLAS office, or contact us HERE.  Your ATLAS LPG Team is always ready and happy to help, whatever your needs may be!

 Investment advisory services offered through ATLAS Lifestyle Planning Group (ATLAS LPG), a Registered Investment Advisor.  ATLAS LPG will only provide investment advisory services in jurisdictions where it is registered as an investment adviser or exempt from registration.  Insurance and annuities offered through ATLAS Risk Management Group (ATLAS RMG) CA License # 0M41231.  ATLAS LPG and ATLAS RMG are separate entities and neither provides legal or tax advice.

(1)  Once you reach age 73, you must begin taking required minimum distributions from your 401(k) or other defined-contribution plans in most circumstances. Withdrawals from your 401(k) or other defined-contribution plans taxes as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty.
(2)  Your required minimum distribution (RMD) is required to be distributed by the end of the 10th calendar year following the year of the Individual Retirement Account (IRA) owner’s death. Penalties may occur for missed RMDs. Any RMDs due for the original owner must be taken by their deadlines to avoid penalties. A surviving spouse of the IRA owner, disabled or chronically ill individuals, individuals who are not more than 10 years younger than the IRA owner, and child of the IRA owner who has not reached the age of majority may have other minimum distribution requirements.

* Some of the information found in this article may have been provided by FMG or Assetmark Inc.