This week’s theme is 5 beneficiary mistakes to avoid. If you’re like most people, you probably set up your beneficiaries on your IRA and 401k accounts 2 decades ago, and haven’t spent much time revisiting them (let’s be honest...you have no idea who’s on there). But that’s ok, because this week, I’m sharing with you beneficiary mistakes that I see clients make and how you can avoid them. You just need to dig up the information and take the time to review it. This week is dedicated to helping you with that process. 

Today, I’m talking about the most common beneficiary mistake that I see: assuming that your will has you covered. 

Or worse, naming your estate as your beneficiary. While researching this week’s topic, I came across an article on bankrate.com, which I will link to in the show notes, that said naming your estate as a beneficiary can be the “biggest blunder of all”. 

Why? Because current laws allow beneficiaries to stretch the distributions on IRA and 401k accounts. This is especially helpful for your children, since they can elect to take distributions slowly over time, rather than be forced to take the money out of your IRA all at once. 

The immediate tax bite of naming your estate as beneficiary in this situation, coupled with the loss of continued growth for your heirs is a double whammy mistake! 

The takeaway here is to take the time to carefully consider who you want your beneficiaries to be, and actually take the opportunity to name them as beneficiaries. 

Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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