What Happens To Your Retirement Plan When a Spouse Passes Away? - The Prepare Institute: Preparing Americans for Retirement

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

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 topic.  The fact is, this is a scenario that is going to come up as 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, and 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 lives.  In addition, there are changes that will need to be made to transfer it the most proper way after the surviving spouse passes away to all the contingent beneficiaries, including children, grandchildren and any legacy desires.  So, even though this is not a fund topic to discuss, it is critical information that certainly can help people plan to make this eventual time as smooth and painless as possible. 

The lack of planning or the incorrect planning in these areas could cause many problems and cost your family tens of thousands or even hundreds of thousands of dollars if done wrong, and succumb a surviving spouse and/or other heirs to a lot of pain, suffering and financial distress.  To learn of the many changes that happen and critical decisions that will need to be made including tax issues, visit The Prepare Institute website and find an upcoming retirement education course in your area.   

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.