When Was the Last Time You Updated Your Beneficiaries?

I spent an entire afternoon updating one beneficiary designation with CalSTRS—and it reminded me why so many people put off this important task. Yeah, I got the death benefit updated from my late spouse to my new spouse, but I found other extremely old information!

First came the surprise: I waited 2½ hours on hold before reaching a representative.

 

Then I spent another two hours on the phone while we worked through the changes together. Even after all that, the update is only about 90% complete.

My goal seemed simple: change the beneficiary on my CalSTRS one-time death benefit from my late husband, Dan, to my wife, Georgiana. I had tried several times earlier this year to do it myself, but the process became too complicated.

As we dug into my account, we discovered outdated information everywhere. An old family trust still listed Dan’s name twice and our former Los Angeles address from years ago. Some information couldn’t be edited online. Because one update was marked “Pending,” I first had to complete a DocuSign before I could begin the next step. Then G and I both had to sign another DocuSign. Unfortunately, it contained the wrong phone number for her, preventing the required security verification. That meant starting yet another round of paperwork.

Then came the biggest surprise.

The CalSTRS representative found the condolence letter they had sent after Dan died in 2015—but they could not find the death certificate I had submitted at that time. I distinctly remember providing it and speaking with CalSTRS after his death. The representative has asked their management team to investigate what happened.

After all these unexpected issues, I also wondered whether my retirement benefit itself was correct. Years ago, after Dan passed away, I believed I had changed my retirement option from a Modified to an Unmodified benefit, since my annual benefit increased by about $5,000. Thankfully, the representative confirmed that my pension is correctly listed as Unmodified, meaning I am receiving the proper benefit.

CalSTRS will send me a confirmation letter showing that Georgiana is now the beneficiary for the death benefit, although I still need to correct some of her contact information before everything is finalized.

The woman who helped me was very patient and knowledgeable. I gave her high marks in the survey after the call. But the CalSTRS system has to make the online experience a lot less onerous and complicated. 

The Lesson

• This experience taught me why so many people never update their beneficiaries. Life changes—marriage, divorce, death, children, trusts, addresses—but paperwork often doesn’t keep up. The process can be frustrating, time-consuming, and surprisingly complicated.
• But imagine the alternative.
• An outdated beneficiary designation can create unnecessary delays, confusion, and hardship for the people you care about most. Spending a few hours today can spare your loved ones far greater problems later.
• If you haven’t reviewed your beneficiary designations recently—for your pension, retirement accounts, life insurance, bank accounts, or trusts—put it on your to-do list.
• It may take an afternoon.
• It’s still one of the most important financial tasks you’ll ever complete.

Steve’s Bio

 

 

Stephen A. Schullo, Ph.D. (UCLA ’96) taught in the Los Angeles Unified School District (LAUSD) for 24 years and at UCLA Extension and retired in 2008. The first-generation Italian-American ex-Marine and Vietnam veteran wrote investment articles for United Teachers-Los Angeles’ union newspaper (circulation 40,000) for 11 years. A thrice-featured volunteer retirement plan advocate, twice in the Los Angeles Times and once in U.S. News and World Report. Steve and his late husband, Dan, were featured on the national PBS Frontline broadcast, “The Retirement Gamble.” He started an investor self-help group with Sandy Keaton for LAUSD colleagues and wrote 8000 posts in three investment forums since 1997. Frequently quoted and interviewed by the media, testified at California state legislative hearings, and was honored with the “Unsung Hero” by the 40,000-member Los Angeles teachers’ union for his retirement investing advocacy.

After 20 years, Steve still serves on LAUSD’s Investment Advisory Committee as Member-at-Large and former co-chair. The committee oversees 457(b)/403(b) plans for 55,000 former and current LAUSD employees, with assets of $4  billion. We update the 457(b) plan by lowering costs, choosing index funds, implementing auto-enrollment, and adopting a Roth 457(b). In 2014, our 567(b) plan earned a Plan Design Award from the National Association of Government Defined Contribution Administrators (NAGDCA) and most recently won another award in 2024!

He self-published two FREE personal finance books: Late Bloomer Millionaires and Fighting Powerful Interests.