MICHELLE SMALENBERGER, CFP®
[Video] Your Beneficiaries Matter: Check Who They Are
It’s time to do a really quick check of your beneficiaries. This is something that is really easily overlooked.
I want to review some of the common accounts where you need to set a beneficiary because this is what states who inherits the funds that are in these accounts.
So here is a common list:
IRA or Roth IRA
When you think of your IRA or Roth IRA, these are accounts where you actually list who the beneficiary is.
An HSA, also known as you Health Savings Account.
401(k) or 403(b)
Your 401(k) or 403(b), so really any of your retirement accounts. These are actually things you set with your employer. It is very common if you’ve worked somewhere for 30 years, you might have started working there right out of college, and maybe you put a parent or a sibling. Now you are married with children and you forgot to update those retirement accounts.
This is why this is such a big thing to check, because it is so easily missed.
The last one here is life insurance. And again, this is one when you set up these policies, you set them up as a 30 year term policies perhaps, and when you set them, you put beneficiaries at the time, but again, we forget to go back and check them.
Primary & Contingent
What you are looking for is that you have a primary beneficiary. That means if something happens to you this is the first person. And then the second contingent means if the first person predeceases you, now you need to have a contingent beneficiary. And that just means that if the primary is not living, then the contingent beneficiary will inherit the assets.
Whenever you are making these changes to these accounts to update beneficiaries, if you haven’t already. As you are checking off each one from the list, be sure to just print out a confirmation or a summary so that you know you made a change and you are up to date. That way you have a record of it.
Ultimately, when you are checking your beneficiaries and checking to make sure the primary and contingent are the people are sure are receiving your assets and are the ones that you love. So we are caring for them by doing this quick check of who the beneficiaries are.
Wondering how this affects your finances? Contact us to discuss!