In the event that you pass away, you want to ensure your 401(k) assets are inherited by a person you care about. To ensure this happens, it’s crucial to add a beneficiary to your 401(k) account.
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When setting up your account, the guided enrollment wizard will ask you to designate a beneficiary. Although a beneficiary designation isn’t mandatory, you should take the time to choose your beneficiaries. This is also beneficial to those close to you, as it will save them the hassle and delay of determining who should receive your account assets.
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It’s also important to note that a 401(k) plan is never subject to the direction you provide in a will. If you name a beneficiary for your 401(k) plan in your will but fail to designate them according to the process below, your account will be distributed according to the default beneficiary language in the plan and not what is stated in your will.