The Nuts and Bolts of a 401(k) plan
- Introduction
- Contributions
- Your Money Stays in the Plan
- Rollover from a Previous Employer
- Investing Your 401(k) Funds
- Selecting a Beneficiary
- Comparing your 401(k) to Other Retirement Plans
- Should You Participate in a 401(k) Plan?
- Does Your Spouse Have a 401(k) Plan?
- Deciding How Much to Contribute to the Plan
- What Can You Afford to Contribute?
- Limits on Contributions
Selecting a Beneficiary
When you enroll in a 401(k) plan, you'll need to identify a beneficiary in the event of your death. Here is a list of beneficiaries you might choose in the event of your death:
- Spouse—the choice of most married couples. If you should die and your spouse is the primary beneficiary, he or she can roll the money from your 401(k) plan into a traditional IRA. This is available only to a spouse. There will be no tax due on the money (and earnings continue to build up tax-deferred) until a distribution from the spouse's IRA is made.
IMPORTANT NOTE: To name a beneficiary other than your spouse, you and your spouse will have to complete a beneficiary designation form. Your spouse's signature consenting to this must be notarized.
IMPORTANT NOTE: If your spouse is not a U.S. citizen, certain restrictions may apply.
- Children—usually named as secondary beneficiaries (If the primary beneficiary dies, then the secondary beneficiary will inherit the money.)
- Parents—the choice of most single people. But, if you are single and have a child, your child would likely be the first choice. Your decision may depend on the ages of your parents and your child.
- Relatives—usually chosen if you have no other family members listed above.
IMPORTANT NOTE: It is recommended that you review your beneficiary selections periodically. Revisit your beneficiary selection when there is a change in your family status.
Investment and insurance products and services are offered through INFINEX INVESTMENTS, INC. Member FINRA/SIPC. First Community Financial Consulting is a trade name of Pennian Bank. Infinex and the bank are not affiliated. Products and services made available through Infinex are not insured by the FDIC or any other agency of the United States and are not deposits or obligations of nor guaranteed or insured by any bank or bank affiliate. These products are subject to investment risk, including the possible loss of value. NOT FDIC INSURED BY ANY FEDERAL GOVERNMENT AGENCY, NOT GUARANTEED BY THE BANK, MAY GO DOWN IN VALUE.
