Have You Integrated Your Estate Planning Goals into Your Retirement Planning?

Estimated reading time: 2 minutes(Last Updated On: October 31, 2018)

There are two important types of long-range financial planning that most of us have to go through as we mature. The first, of course, is retirement planning. We know that at some point we’re going to want or need to stop working, and we realize that whatever Social Security income we receive is likely to be inadequate. So we save.

The second type of planning is estate planning. We know that at some point we’re going to pass away, and we would like to make sure that whatever wealth we’ve accumulated up to that point is distributed in accordance with our wishes. The challenge sometimes lies in the fact that our retirement accounts have beneficiary designations that can supercede the terms of a last will and testament.

Here are some tips for integrating your estate planning goals into your retirement planning:

  1. Review Your Beneficiary Designations. The first step should be to evaluate your current position. Begin by reviewing the beneficiary designations in your self-directed IRAs, your other retirement accounts such as 401(k) accounts at work, your taxable investment accounts, and even your bank and checking accounts. Write all of these beneficiaries down on a single piece of paper. Aggregate the amounts to each individual, and verify that these are consistent with your wishes.
  2. Review Your Will. Next, compare these names and amounts with the provisions of your will. (And if you don’t currently have a will, then make getting one an immediate high-priority goal!) Again, look to see if the sum total of these various designations and bequest match your estate planning goals.
  3. Name Contingent Beneficiaries. It can be an uncomfortable process, but for each of the primary beneficiaries named in each of your retirement account, ask yourself what you would like to happen with your bequest if they were to predecease you. For example, if you’ve named a sibling as a primary beneficiary, then what would like to happen with those funds if they die before you? Should those funds go to the sibling’s spouse? To their children?To your other siblings?Or to someone else entirely.
  4. Conduct Annual Reviews. Even if you’ve given careful thought to naming contingent beneficiaries, you should consider developing a habit of reviewing your designations on a regular basis. Many individuals have found success in tying this review into the preparation of their tax returns.
  5. Choose an Appropriate Retirement Savings Vehicle. A Roth self-directed IRA can be the ideal account for making sure your retirement saving matches your estate planning goals. With a Roth self-directed IRA you can continue making deposits throughout your life, even after you reach age 70, and you won’t be subject to the rules on required minimum distributions. In addition, Roth accounts have extra features that make it easier to pass down your account to your spouse after you pass.


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