IRA Mistake #3:
Not Naming a Beneficiary

When you set up an IRA, you are not required to name a beneficiary. Name one anyway! If there is no beneficiary on your IRA, the money in the account will typically have to go through probate, which can be an expensive and lengthy process. Also, the funds will be paid out over the remaining life expectancy of the deceased (or over five years), which will likely be shorter than a named beneficiary's life expectancy. This means the money is disbursed more quickly, putting a heavier tax burden on whoever receives the money.

Avoid this major IRA mistake and name a beneficiary so you can be certain where your IRA will go, and how quickly it will be distributed upon your death.

Next: IRA Mistake #4: Not Contributing to a Spousal IRA