
Imagine This Scenario Maria is 50 years old and vested in her employer’s defined benefit plan. She is not married and has a 22- year-old son named Jeff. He is a full-time college student and lives at home with Maria to save money. Maria intends to name Jeff as her beneficiary so he would receive a lifetime benefit should something happen to her, but keeps forgetting to do so.
One night Maria is involved in a car accident and does not survive. Because she never named Jeff as her beneficiary, he is not entitled to receive her monthly pension benefit. Now, Jeff has not only lost his mother, but may need to put off finishing his degree so he can pay the bills.
While this story is fictional, the lesson is not. It is important for your loved ones that you keep current beneficiaries on file for your retirement plan(s). While we all hope to live well into our golden years, that’s not always the case. By having your desired beneficiaries in place, you are saving them time and additional heartache during already sad and stressful circumstances.
When it comes to beneficiaries, there are a few important tips to consider:
Name Your Beneficiaries
It seems simple, but one of the biggest mistakes people make is not designating beneficiaries. Many times it is as simple as logging into your account and entering some basic information such as your beneficiary’s name, address, telephone number, Social Security or identification number and date of birth. If you are married, make sure your spouse takes this action as well.
Designate All Beneficiary Types for Each Retirement Plan
If you have multiple retirement plans, make sure to name a beneficiary for each one. And if your plan has multiple beneficiary types, you will want to do the same. Check Beneficiary Information Often Set it and forget it? Not with beneficiary information. It is important to check back often – at least annually or whenever life circumstances change – to make sure all beneficiary information is accurate.
There is nothing more important than protecting those we love and an essential part of that is making sure they are taken care of after we are gone. Add or update your beneficiaries today – for their protection and for your peace of mind.