DES MOINES, Iowa (AP) – Most 401(k) investors are worried about whether they’ll outlive their savings and haven’t given much thought to the opposite scenario.
This can be a big mistake because there are inheritance rules that may require your account to be distributed in a way that you didn’t foresee.
So for starters, confirm who is listed as the beneficiary of your account. You should have filled out a beneficiary form when you opened the account, but it’s a good idea to reevaluate it periodically. It’s especially important if you’re recently divorced or experienced other life changes that would prompt you to rethink your choices.
What’s more, you’ll want to understand the tax implications for those you leave behind.
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