A new retirement account might enter the estate planning field

For many Pennsylvania workers, company-sponsored 401(k) plans are a part of their estate planning. Such planning for the future encompasses not only a worker's financial strategy after retirement, but also planning for the future of their loved ones. In that regard, most 401(k) retirement accounts also allow workers to designate a beneficiary, in the event that assets remain at the time of an inheritance.

But what about workers whose employers don't offer a 401(k) or similar type of retirement-savings plan? Some experts estimate that as many as half of working Americans might not have this option. In numbers, that implicates around 75 millions Americans.

At last night's State of the Union address, President Obama proposed a new retirement planning vehicle. Called myRAs, the proposed investment vehicle would operate similar to a savings bond, with a guaranteed return. Some commentators have observed similarities between Obama's proposal and the interest-paying R bonds proposed by the Treasury Department.

An attorney that specializes in estate planning knows that different tax laws may apply to different assets and investment vehicles. For example, a beneficiary may have to pay income tax on distributions from 401(k) plans, with the possible exception of Roth 401(k)s. In the case of the proposed myRAs, there may be minimum vesting periods, during which time a worker could not roll the funds into other retirement accounts.

For workers concerned about their future, an attorney might provide insight about different planning options. An attorney can also ensure that any chosen option includes the appropriate legal, financial and insurance instruments.

Source: The Wall Street Journal, "Will the 'myRA' retirement plan take off?" Matthew Heimer, Jan. 28, 2014