When was the last time you checked the beneficiaries on your university retirement plans? If you're like many university employees, your 403(b), 401(a), 457(b), or 403(b) SRA beneficiaries might not have been updated since you first set up your account. Life happens—marriages, divorces, births, deaths—and these changes can significantly impact who you want to inherit your retirement savings. Taking just a few minutes every year to review your beneficiaries ensures your money aligns with your current wishes.
Why Annual Reviews Are So Important
Life events often trigger the need to update beneficiaries. Imagine you set your beneficiaries years ago and then experienced a significant life event like divorce or remarriage. Without updating your account, your retirement savings could unintentionally go to someone who no longer plays a role in your life. Regular annual check-ups prevent these potentially stressful situations.
Key Moments to Check Your Beneficiaries
Mark your calendar to review your beneficiary designations whenever you experience:
Marriage or remarriage
Divorce or separation
Birth or adoption of a child or grandchild
Death of a previously named beneficiary
Significant changes in your family dynamics
Being proactive about updates helps ensure your intentions remain clear and accurate.
“Per Stirpes” vs. “Per Capita”—Why It Matters
Understanding the terms "per stirpes" and "per capita" is important because these determine how your retirement account assets are distributed if a beneficiary passes away before you do.
Per stirpes: Your beneficiary’s inheritance passes down to their descendants (children or grandchildren) if your original beneficiary predeceases you.
Per capita: The inheritance is equally divided among your surviving named beneficiaries only, without regard to descendants.
Make sure you clearly specify your preferred method to avoid unintended distributions.
Pro Tip!
If you open an account later, such as the 457(b) or the 403(b) SRA, don't forget to list beneficiaries for this account. Your existing beneficiary designations don't automatically carry over.
How to Quickly Update Your Beneficiaries
Updating beneficiaries is simple and can usually be done in a few clicks:
Log into your Fidelity or TIAA account.
Navigate to the settings or beneficiary designations section.
Review your current beneficiary information.
Update any changes, confirm the details, and save.
We recommend doing this annually—perhaps alongside other routine financial check-ins, such as during open enrollment or tax season.
Quick Reminder
Don’t stop at your University plan accounts. Insurance policies and other outside accounts need updating too!
Want the Full Retirement Check-up?
This post is part of our Annual Financial Tune-Up series designed specifically for university employees. For the complete 5-point checklist to keep your retirement strategy sharp and effective, download our Annual Financial Tune-Up Guide today!
Next in the Series:
Stay tuned for next week’s post, "How to Boost Your Retirement Contributions Annually without Feeling the Pinch," for easy ways to incrementally increase your savings and strengthen your financial future.