When you have a 401(k), IRA, or other retirement accounts, you will be asked to name beneficiaries to make clear who would like to receive your funds in the event you pass away. If you don’t name your beneficiaries or keep them updated, your funds could be disbursed in an unintended way. It is important to review your beneficiary designations often to determine if any changes need to be made.
Below are some additional tips that can help ensure the right parties receive your retirement funds:
Maintain a beneficiary file to easily retrieve a list of all of your retirement accounts and beneficiaries listed. This will help you to keep track of your current beneficiary designations as well as help friends and family manage formalities in the event of your passing. If you prefer not to have your beneficiaries know about accounts while you are still alive, consider leaving instructions with your legal representative or a trusted individual to provide the information if and when the time occurs, or make other suitable notification arrangements.
Review your beneficiaries after each major life event, including but not limited to marriages, births, adoptions, deaths, divorces, or if your financial institutions change.
Review all account-related documents as different retirement accounts may have different provisions for your beneficiaries. While your 401(k) plan document could provide that in the event of a divorce, your spouse is automatically removed as your beneficiary, your IRA may allow your former spouse to remain your beneficiary unless you update the beneficiary designation.
If you want to name someone other than your spouse as a primary beneficiary of your retirement account, you may be required to collect your spouse’s notarized consent.
Be sure to visit your Guideline dashboard if you haven’t updated your account information recently or if recent circumstances warrant an update to your beneficiary designations. Learn more about designating beneficiaries of your 401(k) or IRA.