Retirement & Financial Planning Report

An IRA that’s relatively modest, when you retire, still can generate a substantial amount for your beneficiaries, if you pass the account to them on your death and the distributions are extended to the limit. However, many things can go wrong.

How can you choose the right bank, broker, or mutual fund company handling your IRA?


* Don’t deal with the person sitting behind the customer service desk or a phone rep. Chances are, that person has little or no training on complex IRA issues.

* Look for a separate pension department. Specialists are needed to keep up with all the rules. Small institutions that try to “make do” with general advice may not have enough know-how.

* Interview the custodian’s pension specialists. If significant amounts are involved, it’s worthwhile to get together with representatives of the institution before making any commitments.

* Look before leaping. Before placing your money with an IRA custodian, find out if it permits the stretchout IRA you desire.

* Focus on the forms. If you already have one or more IRAs, make sure you have a form on file with the provider. (That is, make sure it hasn’t been lost).

If your beneficiary form can’t be located, fill out a new one or supply your own, using the procedures described above.

* Check all the information on your beneficiary form for accuracy. Some errors–an incorrect birth date, for example–can have serious consequences.

* Keep copies of all correspondence regarding IRA distributions. Have your professional adviser keep these documents so they can be produced if and when a dispute arises. With so many mergers among financial institutions, beneficiary forms may be mislaid. Make sure you have your own acknowledged copies and your heirs know where they are.