What happens to your retirement plan if you die?

When the most unfortunate of times are upon us, our pre planned choices are extremely important when striving to take care of the ones we love. This often avoided subject can also be one of the most important you will ever make.


“What happens to your retirement funds if you die before retirement?”


The Importance of a Beneficiary


Well, the first thing that every person who has a retirement plan should understand is all retirement plans go to a named beneficiary, whoever you put on that document when you first set that plan up.


So if you have a 401K, you should go to your HR department and make sure that your beneficiary is current. If your IRA is held at a brokerage company, you’d want to call them and make sure that that beneficiary form is suitable to you.


Restrictions on your Retirement Funds 


But more importantly in a bigger picture question, and that is if you die before retirement, what happens to the person as they receive that money?


And let’s use an example; your retirement funds go to your wife. Well, your wife would find that she has the same restrictions on that retirement money as you do, meaning those funds are not available to her until she reaches a qualifying age, generally, of fifty nine and a half.


And so if you die too early, counting on those retirement funds to provide an income for your spouse before retirement, that would be quite a disappointment for her.


Look at the Bright Side


The good news is I help people with a variety of different retirement plans, many of which transfer all of your retirement money absolutely tax free using death benefits that are unrestricted, so that your beneficiaries have immediate use and control of that money. They are not burned with the tax rules that other types of qualified plans impose upon them. So I would encourage you, take a look at all of the alternatives.


Finding the answers

I created twenty videos responding to the most important questions that people ask me about their money, their financing, their investment, and their retirement plans.


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