For amounts under a qualified plan, your employer will establish your account. However, you may need to complete election forms in order to make salary deferral contributions, unless the plan includes a feature that allows the employer to enroll you for salary deferral on an automatic basis. For IRAs, you will need to establish the IRA before you can make contributions. New contributions can be added to existing IRAs.

An important part of your account document is your beneficiary designation form. This must be completed when your account is established, and should be reviewed at least once per year and when there is a life-changing event such as marriage, divorce, death of a beneficiary or a new addition to the family who you want to be one of your primary or secondary beneficiaries. Failing to complete and update your beneficiary form could result in the wrong person inheriting your retirement accounts.

Next: Retirement Planning For 20-Somethings: Choosing And Managing Your Investments »


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