What happens if you had a retirement savings account, and then you pass away?

My father in law saved up a 401(k) or something. He saved up maybe $100k and had it until he passed away when he was 50. (He died from a heart attack, very sudden.) Only maybe $10k of it got to my MIL, the rest had to go to the government because of some tax or something. I (22 M) don't understand how it works. I can only assume the same thing will happen to my dad (52 M) when he passes?<br><br>How do you save for retirement?<br><br>I'd like to set up a thing at my job to take out some money for a retirement savings account there too. How much should I set aside each month?<br><br>I'm a lot more careful with my money nowadays. I read r/relationship_advice a lot and it has taught me a lot by reading about others' financial problems.<br><br>Edit: Thanks for all the replies so far! I'll bring it up to my dad. He's very good with his money but very private about talking about money. I'll also bring it up at work and try to make some other financial plans.<br><br>Edit2: My husband is reading through the comments, I did not expect this many responses. Thank you all. I will do my research.