keyboard_backspaceBack to main blog page

Fleming Financial Services Blog

At Fleming Financial Services, Inc., our role is to assist our clients in defining and realizing their financial objectives and goals. We work with our clients to implement personalized plans designed for their unique situations. Our areas of concentration are: Retirement planning, Estate and Wealth Transfer strategies, and Business Continuation planning. We emphasize the importance of conducting our business with integrity and professionalism. As a member of PartnersFinancial, an independent national financial services company, we are able to provide access to sophisticated resources for the benefit of our clients. Some of the professionals with our firm are currently registered to conduct business through NFP Securities, Inc. With those additional resources in place, we help facilitate the complex corporate and personal financial decisions our clients must make.

When I die, what will happen to my retirement plan benefits?

Thomas Joseph Thomas Joseph , 2/12/2015
This content has not been rated yet.
Fleming Financial Services, PA, RetirementIn general, your retirement plan benefits pass to the beneficiaries you designate on the plan beneficiary designation form. It is generally recommended that you designate beneficiaries, the percentage of the total that each will receive, and any backup beneficiaries on the plan beneficiary form. However, if you are married or have been married, your spouse or former spouse may have certain rights in your retirement benefits. If you have a large taxable estate (generally, over $5,430,000 in 2015), your retirement benefits could be subject to estate tax or generation-skipping transfer (GST) tax at your death. The GST tax may apply if you transfer your retirement benefits to someone who is two or more generations younger than you, such as your grandchild. After your death, your beneficiaries will generally be required to take minimum distributions from your retirement plan over their life expectancies. (Of course, your beneficiaries can always withdraw more than the required minimum amounts.) The rules may be more favorable if your surviving spouse is the beneficiary of your retirement plan. In general, for income tax purposes, your beneficiaries will include distributions from the retirement plan in income when received. Your beneficiaries can take an income tax deduction for estate tax (if any) attributable to the retirement plan benefits; the deduction is apportioned and taken into account as distributions are received and included in taxable income. If you have made any nondeductible contributions, your beneficiaries can generally exclude a portion of the distributions from taxable income. However, if you have not made any nondeductible contributions, the entire distribution will generally be included in the beneficiary's taxable income. On the other hand, distributions made after your death from a Roth 401(k) plan or a Roth IRA will generally be qualified distributions that are not taxable income to your beneficiaries (as long as certain five-year holding periods are met). Your retirement benefits may also be subject to state estate, inheritance, GST, or income taxes. Securities and Investment Advisory Services may be offered through NFP Advisor Services, LLC, (NFPAS), member FINRA/SIPC. NFPAS may or may not be affiliated with the firm branded on this material. Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2015