401k retirement withdrawal zeroed out at my death

All the reports show that at my death at 89 my 401k funds have been depleted and the withdrawals end. The problem is, I inputed that my wife would live to be 95 and we would like the smooth withdrawals to extend to her expected year of demise. She has no retirement funds from her working years before we got married. Also, when I die my defined pension should go to 75% of what it was when I was alive. Even accounting for inflation, it is much less than 75% the year after I die. Would appreciate advice on what is happening.


dan royer's picture

Yes, so retirement accounts belong to the adult that owns them, not to both. There can be a beneficiary but in this case, the person is dying when expected in your model so the funds are used up as per the settings where you intend to spend 100% of one's retirement assets and so these are spent down from the current year through age 89. That's working as designed.

You could indicate that you want to spend less than 100% of non-annuitized assets and the unspent amount would be inherited by the survivor. That setting is in the retirement account area. Set it to 90% or try 80% instead of 100%.

It sounds like the pension is not indexed fully to inflation--which is very common with pensions--so inflation eats away at the purchasing power and given that the reports are in today's dollars you should see them go down year over year. If they get a full cola adjustment each year, they would stay the same year over year.


Thanks Dan. First, if I reduce the non-annuitized per your suggestion, can I start a new retirement fund to carry over in my wife's name with the remaining funds?
I realize the non-inflation indexed pension funds go down every year but at my estimated death at 89 when the remaining amount was much lower than the 75% benefit she is to be given after accounting for inflation.Specifically, in 2043 (my age 89) my pension is $35,100 and it does go down every year by 2.5% for my inflation input.
When my wife's portion of my pension kicks in in 2044 it is only $17,590.I believe she is to get 75% of what we were getting before my demise.

Lastly, I inputted my pension starting at $45,655 in 2019 but in the Richard Survivor Non-Asset pension income page it shows as starting in 2022 at $60,173.


Duh...Ignore the last paragraph. I forgot about my VA disability which is considered a pension. I did input a reduction in smoothing and saw that took care of that problem without having to create a new 401k for my wife. I really appreciate all your expert help.

dan royer's picture

Oh, glad you caught that!

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