If you have a Solo 401(k) plan, then you are the administrator and the trustee. You have complete control over the plan. In short, you get to plan what will be your retirement savings and who will be the beneficiary of this plan when you are not there. You must decide on the beneficiary list for Solo 401(k) among the different retirement plans you have. If you name the beneficiary, the account will avoid ending up in probate, and the retirement amount will not be distributed as you wanted it to be. Today, we will discuss who can be the beneficiaries and how you need to chalk out the entire process.

  • Assigning 401k beneficiaries – What is the procedure?

You can have more than one beneficiary. When investing in Solo 401(k), you must mention the primary and contingent beneficiaries. It would help if you did this by filling up and submitting the beneficiary designation form without delay. Deciding on who will be the beneficiary is an entirely personal decision. It is primarily guided by your existing situation and the kind of financial goals you have in mind.

However, keep one thing in mind, the moment you are married; federal law will select your wife as the primary beneficiary. If you don’t want that, you must obtain spousal consent. Without consent, you cannot name someone else as the primary beneficiary for your Solo 401(k). You can name more than one individual as your primary and single contingent beneficiary. Many Solo 401(k) owners have multiple beneficiaries. There are many incidents where the beneficiary has expired before you or the person is not interested in becoming the beneficiary. Hence, it is a good idea to have multiple beneficiaries. Remember to mention the percentage each beneficiary will get in the case of multiple beneficiaries. 

  • Review your Solo 401(K) beneficiaries annually:

It is a good habit to review your Solo 401(k) annually. Generally, the mix of assets and their value change with time. This happens because market trends change. There are many cases where an individual has also named their children as the beneficiary. It is up to you whether you should change the beneficiaries and the percentage you will give them. It depends entirely on you. 

In addition, if there is a significant life event, you need to review your list of beneficiaries – add or subtract the beneficiary’s name accordingly. It is always wise to keep a copy of the beneficiary designation form along with your other estate investment documents. 

To sum it up:

Planning for your retirement is essential. To make the most of your Solo 401(k) plan, visit solo 401kCollect all the details to know more about this. If you have any queries, you can always get in touch with experts and clarify all your doubts. At the same time, naming the beneficiaries is equally essential. Unless you chalk out everything right at the start, there can be problems regarding your assets when you are not there. Be wise and take the steps accordingly. 


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