Step 1

Review your client’s life events

Speak with your client to determine if he or she has experienced any recent life events. These could include:

• Marriage or divorce
• New baby or dependent
• Disability
• Retirement
• Job change or loss

Depending on your client’s situation, you may need to help your client roll money over from a retirement account, update beneficiary designations or take a distribution.

Step 2 

Assist with rollovers, beneficiary updates or distributions

Help roll money over from a retirement account
Understanding the rollover process can help you guide your client and reinforce your credibility.

• Set up a traditional or Roth IRA if your client doesn’t have one to receive the rollover.
• With your client’s help, get the employer’s distribution form and request a direct rollover. Your client may also complete our rollover form if the sending institution will accept it.
• Follow up to ensure the plan sponsor mails the distribution form and other necessary paperwork to the third-party administrator (TPA) or recordkeeper.
• Once the rollover is complete:
  • The TPA and/or recordkeeper will send a distribution confirmation to the plan sponsor.
  • The IRA custodian will send confirmation of the IRA deposit to the client.

Resources to use:
Life events checklists
IRA incoming transfer and rollover guide
Open a traditional IRA
Open a Roth IRA

Manage beneficiary designations

Knowing the ins and outs of beneficiary designations can help you fully satisfy your client’s planning objectives, extend income from an IRA and create a new generation of clients.

Conduct a beneficiary review

• Order a report listing the beneficiaries for your client’s IRAs.
• Send your client a beneficiary review letter and follow up with phone calls.
• Ask for introductions to the beneficiaries when appropriate. Meeting the beneficiaries can help you create a relationship with the next generation and make them future clients.
• Discuss how the SECURE Act impacts the ability to use the “stretch IRA” option if your client wants to leave IRA assets for future generations.
• Offer free beneficiary reviews for prospective clients. Your attention to details like wealth transfer could help convince them to move their IRAs to you.

Resource to use:
IRA beneficiary designations

Take a distribution
Help your clients make distribution decisions that will help their money last throughout their retirements.

Normal distributions
For clients age 59½

or more.

• Consider depleting taxable accounts first to extend the advantage of tax deferral as long as possible.
• Consider setting up a systematic withdrawal for retirees or other clients who need a steady stream of income from the IRA now.

Early distributions
Distributions from an IRA before age 59½

will normally incur a 10% tax penalty in addition to income taxes. (The tax penalty is increased to 25% for distributions from SIMPLE IRA plans made within the first two years of participation.) However, under section 72(t) of the Internal Revenue Code, the penalty doesn't apply to distributions resulting from:

• Death
• Disability
• Catastrophic medical expenses
• Health insurance premiums during long-term unemployment
• First-time home purchases, up to $10,000
• Qualified higher education expenses
• Substantially equal periodic payments

Required minimum distributions
With the exception of Roth IRAs, required minimum distributions (RMDs) from an IRA are required to begin April 1 of the year following your client’s 73rd birthday. Roth IRAs do not require RMDs until after the death of the owner.

The SECURE 2.0 Act increased the age when RMDs must begin from 72 to 73, effective for individuals turning 72 on or after January 1, 2023. If your client reached age 72 before this date, they are still required to take RMDs.

Beneficiary distribution options
The beneficiary’s relationship to the account owner determines the rules and restrictions for beneficiary distributions.

Six steps to make RMDs easy for your clients:

1. Consolidate your client’s accounts to simplify the RMD process.
2. Order an RMD report that shows your IRA clients who should be taking RMDs. (Your firm may be able to provide a report.)
3. Send annual RMD reminders to those clients that haven’t set up automatic distributions. (Birthday cards add a nice personal touch.)
4. Follow up on the RMD notifications sent when traditional or SIMPLE IRA owners turn 73.
5. Use an RMD planner to determine the amount your client will need to withdraw.
6. Reinvest the distribution if your client doesn’t need the money now.

Tip from top sellers
Financial professionals who do a lot of rollover business have told us that tracking the paperwork through each stage of the rollover process is a key client service.

Some have designated one person in their office to handle all rollover paperwork and follow-up phone calls. One even gives a bonus if that person is able to complete the rollover within one month.

Resource to use:
Required Minimum Distribution (RMD) Guide