Don’t forget to check your beneficiary designations every year

Beneficiary Designation Form

Do you remember filling out the beneficiary designation form for your retirement account or life insurance?

If you are like most people, you probably don’t remember filling out this important form. You may already know that life insurance and retirement accounts are not controlled by your will or living trust, but by the beneficiary designation form that the life insurance company or retirement account custodian have on file. Common mistakes that I see with these assets are that people have no beneficiaries listed or out of date beneficiary designations. For example, if you recently married, you may still have your parents, siblings or other family members listed as the beneficiary. On the flip side, if you recently divorced, you may still have your ex-spouse listed as the beneficiary. Don’t let this happen to you! Make sure to verify your beneficiary designations at least every year. Most of the time, they can be checked online with the life insurance company or retirement account custodian.

How the SECURE Act Will Affect You and the Beneficiaries of Your Retirement Accounts

Retirement Plan

On December 20, 2019, President Trump signed the Setting Every Community Up for Retirement Enhancement Act (SECURE Act). The SECURE Act, which is effective January 1, 2020. The Act is the most impactful legislation affecting retirement accounts in decades. The SECURE Act has several positive changes: It increases the required beginning date (RBD) for required minimum distributions (RMDs) from your individual retirement accounts from 70 ½ to 72 years of age, and it eliminates the age restriction for contributions to qualified retirement accounts. However, perhaps the most significant change will affect the beneficiaries of your retirement accounts: The SECURE Act requires most designated beneficiaries to withdraw the entire balance of an inherited retirement account within ten years of the account owner’s death.