Susan Queary, MAcc, CPA
Senior Manager, Tax Services
Sounds simple: selecting the right beneficiary for your retirement plan assets. Who do you want to get the money? And who do you want to get the money if your beneficiary dies before all of the plan assets have been distributed?
As is frequently the case, the decision is not as easy as it may first appear. Retirement plan assets require special attention because they pass outside of a person's will. Updating your will does not affect named beneficiaries, and a lack of planning in this area can defeat the purpose of a well-thought-out estate plan.
Perhaps the least complicated thing to understand with regard to beneficiaries is the importance of revisiting your choice on a regular basis―particularly after major life events, such as birth, marriage or remarriage, death, or divorce. You wouldn't be the first person to unwittingly bequeath assets to an ex-spouse or another person no longer present in your life.
The rest is a bit more complicated, but there are basic financial and tax considerations that you should understand when making your choice of beneficiary for a 401(k), IRA, or other qualified retirement plan.
Click Full Article for general information on financial and tax issues to consider.
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