You have heard the advice before, so we will only repeat it once, to get ahead financially you must investment; preferably in a tax-deferred retirement investment.
To get ahead financially you should be investing as much as you possibly can into a 401k account and or an Individual Retirement Account.
Now that you have worked so hard to get ahead, the last thing you want is to have those retirement investments improperly distributed if something were to happen to you.
To guarantee that your retirement investments get distributed to who you want them to go to in the event of your death, you need to do some beneficiary maintenance.
What you probably have heard little advice on is the big impact of a simple thing like your 401k beneficiary when it comes to 401k account maintenance.
401k Beneficiary Maintenance
Beneficiaries Accidentally Disappear:
- When was the last time you checked the beneficiary listed on your 401k account….when you opened the account, years ago???
- Today, take the time to call your human resource department to check the 401k beneficiary listed on your 401k account.
- Your financial institution may accidentally change it or even accidentally delete it.
- With today’s advanced technology changes can accidentally be made to accounts without the knowledge of the employer or 401k account provider.
- So just make it a habit to check your 401k beneficiary on an annual basis.
- Also get yourself into the habit of checking the beneficiaries on your Individual Retirement Accounts on an annual basis.
Beneficiaries and Life Changes:
- As your life changes your beneficiaries may also change.
- You may want a different 401k beneficiary or a different beneficiary on your Individual Retirement Accounts when you get married than you had when you were single.
- You may want different beneficiaries if you get divorced than you had when you were married.
- If your current account beneficiaries die – you will have to complete paperwork to designate a new beneficiary.
- Other life changes may occur in the future that you are not even thinking of today.
- So be sure to ask your retirement planner about the process of changing beneficiaries in advance so that you are ready if the need arises.
Both Types Of Beneficiaries:
- You should always have a primary and a contingent/secondary beneficiary on all of your investment accounts…your 401k account, your IRA’s, savings accounts, annuities.
- The primary beneficiary receives the account balance in the event of your death.
- The contingent/secondary beneficiary receives the account balance in the event of the primary beneficiaries death.
- The contingent beneficiary also steps in if you and the primary beneficiary die at the same time.