Speak with your client to determine if he or she has experienced any recent life events. These could include:
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.
Understanding the rollover process can help you guide your client and reinforce their trust in you.
Knowing the ins and outs of beneficiary designations can help you fully satisfy your clients’ planning objectives, extend income from an IRA and create a new generation of clients.
Help your clients make distribution decisions that will help their money last throughout their retirements.
For clients age 59-1/2 or more.
Distributions from an IRA before age 59-1/2 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:
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 72 birthday. Roth IRAs do not require RMDs until after the death of the owner. Here’s how to make RMDs easy for your American Funds clients:
The SECURE Act increased the age when required minimum distributions (RMD) must begin from 70½ to 72, effective for individuals turning 70½ on or after January 1, 2020. If you reached age 70½ before this date, you are still required to take RMDs.
The beneficiary’s relationship to the account owner determines the rules and restrictions for beneficiary distributions.
Refer to our A Time of Change brochure to help explain the distribution options available for each type beneficiary.
Financial advisors 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 advisors have designated one person in their office to handle all rollover paperwork and follow-up phone calls. One advisor even gives a bonus if that person is able to complete the rollover within one month.
Order IRA Reports
Order reports to find out which clients:
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.
This content, developed by Capital Group, home of American Funds, should not be used as a primary basis for investment decisions and is not intended to serve as impartial investment or fiduciary advice.