How to Designate a Beneficiary for a Retirement Account

Choosing a beneficiary for an account is an important part of the estate planning process. If you have retirement accounts, you want to make sure that they go to the proper person when you die. It is important that you keep your beneficiary designation up-to-date with your retirement account holder. If you have a 401k, an IRA, or some other type of retirement account, you will list the beneficiary for your account directly on the paperwork for that account. Here are a few things to consider about designating a beneficiary for a retirement account.

Will Beneficiaries

Many people name beneficiaries for their estate in their will. With retirement accounts, the money from the account is going to be paid directly to the beneficiary that is named on the paperwork with the retirement account. It does not matter if your will says otherwise.

Required Distributions

If you pass away, your beneficiaries going to most likely have to start taking a required distribution from your account. If the beneficiary is your spouse, they will be able to roll the funds into their own IRA. However, if your beneficiary is a non-spouse, they will have to start taking a distribution, depending on the size of the account.