Let your legacy live on — with whomever you choose
Choosing someone to be the beneficiary of your employer's retirement plan is a very personal decision. But many employer-sponsored plans, such as a 401(k) plan, 403(b) tax sheltered annuity or 457 plan, require a non-spouse beneficiary to receive a lump sum distribution following your death. Before the PPA, a non-spouse beneficiary wasn't allowed to defer taxation by rolling over the inherited amount. Starting in 2007, the PPA permits non-spouse beneficiaries to roll over all or any part of the inherited benefit to a new IRA, which must be treated for tax purposes as though it were an inherited IRA. So now you can leave your employer-sponsored retirement plan assets to anyone you choose — including a domestic partner, child, other family member or friend — without concern that they may become subject to immediate taxation.
Ask your Ameriprise financial advisor how you can use these new regulations to help make sure your inheritance wishes are kept. If you don't have an Ameriprise financial advisor, arrange a complimentary initial consultation with an advisor near you.