4 Things You Should Know About Designating Your Beneficiary

4 Things You Should Know About Designating Your Beneficiary

Plan Beneficiaries

Most retirement plans let you designate beneficiaries so you know how your retirement account will get paid out when you pass away. A beneficiary is the person/people or entity/entities who will receive a retirement account balance after the death of the plan participant. Here are four things you should know about designating an account beneficiary.

1. You can have multiple beneficiaries

You can name more than one beneficiary to share in the proceeds. Specify the percentage you would like each beneficiary to receive.

2. It is a good idea to designate primary and secondary beneficiaries

Your primary beneficiary or beneficiaries inherit first. If they are deceased or decline the benefit , the assets will go to your secondary beneficiaries. If you don't have a surviving, named beneficiary, the default beneficiary may be your estate.

3. Your beneficiary doesn’t have to be in your immediate family

Beneficiaries often include spouses, children and other relatives, but they can also include friends, trusts, charities and institutions.

4. You should review your beneficiary information regularly

It is a good habit to update your beneficiary designations annually as well as when you experience life events such as:

• Marriage
• Birth or adoption of a child
• Divorce
• Change of address

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