Estate planning is the process of determining your preferences for property and asset distribution after your death. Regardless of your age, developing a plan for your physical property and financial assets will ensure that your wishes will be followed in the future, including the distribution of funds that are currently part of your retirement accounts.
Investing in Your Retirement
Investing in your retirement is a smart way to build the funds you need after you stop working to continue enjoying the lifestyle you want. The earlier you begin saving for your retirement, the easier it will be to grow your savings. There are several financial vehicles available for retirement savings, including 401(k)s, IRAs, and pensions or employer-sponsored benefit plans. After your death, any savings that remain in a retirement account are considered your financial assets, and can be distributed to a party of your choosing.
Distribution of Retirement Funds After Death
While most assets are distributed through a will, not all financial accounts can be disbursed this way. Financial assets such as life insurance policies and retirement accounts are distributed instead via the specific terms of these accounts, which is why it’s important to name a beneficiary on your retirement policy. Upon your death, any remaining funds in your retirement account will be passed on to this beneficiary; if no beneficiary is named specifically in your policy, a probate court judge will instead decide upon the recipient of your account. Even if you have already named your beneficiary, it’s a good idea to review your policy every few years or after important life events to ensure your current wishes still agree with your existing policy.
Financial Directions, LLC, can help you develop or update your retirement and asset distribution plans at any time. Our services include retirement planning, estate planning, distribution planning, and portfolio analysis to help you make the best financial decisions for yourself and your family. You can reach one of our financial planners via our website, or by calling (520) 408-7777.