What Happens To Your Retirement Plan When A Spouse Passes Away?

By Admin Prepare

September 24, 2021

It is always a hard time when a spouse passes away. Obviously, there are a lot of emotions to deal with, as well as concerns and figuring out how to live without your spouse. But what happens to your retirement plan? Well, unfortunately, there are a lot of changes that happen to a retirement plan when a spouse passes away.

We have received a lot of questions regarding this topic over the last several months, and even though it is not a fun topic to discuss, we decided it was time that we provided some answers and information on this subject. The fact is this is a scenario that is going to come up because most people are married, and one of the spouses will pass away before the other in most cases. And when this happens, there are many changes that happen to a retirement plan. There are some very important and critical decisions that must be made in order to make the retirement plan continue to succeed and take care of the surviving spouse for the rest of their life. In addition, there are changes that will need to be made to transfer it in the most proper way to all the contingent beneficiaries, including children and grandchildren, as well as to any legacy desires, after the surviving spouse passes away. So, even though this is not a fun topic to discuss, it is critical information that can certainly help people with their planning in order to make this eventual time as smooth and painless as possible.

The lack of planning or incorrect planning in these areas could cause many problems and cost your family tens of thousands or even hundreds of thousands of dollars and could subject a surviving spouse and/or other heirs to a lot of pain, suffering and financial distress. In addition, there is one factor that most people do not even think about in their planning which can cost excessive taxation to a surviving spouse. To learn more about this planning scenario and many other retirement planning topics, visit the Prepare Institute website (www.theprepareinstitute.org) to find a retirement course or class near you.

Content is for educational and informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation. You should contact your retirement and tax professional before utilizing any of the information in this article.