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Savings and Investing

Life Changes

Naming a beneficiary

Retirement accounts allow you to name “beneficiaries,” or people/organizations that will receive your retirement savings in the event of your passing.

Selecting beneficiaries is an important step in securing the future of your savings. If no beneficiaries are indicated and you pass away, your retirement account must go through the time-consuming probate process instead of going directly to your loved ones or preferred organizations.

Designating a beneficiary. Most financial institutions make the process of selecting beneficiaries easy by providing you with a straightforward form that allows you to indicate one or more desired beneficiaries, and the percentage of money they should receive in the event of your passing. There is typically no limit to the number of beneficiaries you can indicate, so you can allot different amounts to several recipients of your choice. People generally choose their spouse or children; however, close friends, other individuals, or organizations can be selected as well.

Beneficiary forms usually require some basic information about the intended beneficiaries, as well as their Social Security or tax ID. It’s a good idea to ask the servicer of your retirement savings about how to select beneficiaries, as different companies can have varying requirements.

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