Naming a beneficiary
Do you know what would happen to your retirement savings if you were to pass away? Here are some things you should know about naming beneficiaries that could save your loved ones’ time, money, and frustration.

Facts about naming a beneficiary

48% of people don’t have a named beneficiary.¹  Generally, your retirement account will automatically go to your spouse if you are married. If you leave money with your children or another person, your spouse must sign off on the change. If you are single, your savings becomes a part of your estate. This means the courts will decide how your estate is distributed. Keep in mind that this process can be long and expensive for your grieving loved one.

Types of beneficiaries

Primary, Contingent, and Charities can be chosen as beneficiaries.

• Primary: This is a person/entity you designate as first in line to inherit your assets. More than one can be named.
• Contingent: This is your backup to your primary beneficiary. If your primary beneficiary has passed away prior to your death, the contingent will be next to receive the specified share of your account.
• Charities: Charitable organizations can be listed as primary or contingent beneficiaries, although they must have the legal ability to accept your assets. Information on the charity will be needed as well as knowing the charity’s instructions on who should be the contact person.

Wills

While a will can be a great estate-planning tool, this doesn’t cover your retirement assets. Naming your beneficiary designations in your retirement plan would help your loved ones avoid more paperwork and stress.

Life changes

You should review your beneficiary designations when you have life changes, like marriage, divorce, children, or death, in the family. We suggest reviewing your beneficiary designation annually.

Minors

If you designate a minor/child, nominate a custodian to manage the money with you/your beneficiary’s interest.

You can designate your beneficiary in a matter of minutes

To designate your beneficiary online, you should be able to simply sign into your 401(k) account on your provider’s website and fill out a simple form. If you are married and opt not to designate your spouse, additional signatures may be required.

Act sooner than later just for a little added peace of mind to know that your loved ones will be taken care of if anything happens!

Contact your Beneco Consultant today if you need to take steps to name your beneficiaries.

 

1 Fidelity analysis of 18.9M active plan participants with a balance as of November 2021.