This is not only a great way to help your clients avoid potential mistakes, but also to uncover other retirement accounts for consolidation. Approximately $1 trillion held within employer retirement plans is eligible for rollover into an IRA. This represents roughly 25% of all retirement plan assets. Discussing beneficiaries with clients can help spur them to finally take action on retirement accounts left with former employers.
These types of reviews should be conducted on an annual basis to account for changes within families due to death, divorce, and the birth of children. Having the right beneficiaries listed on accounts is essential in helping your clients ensure their assets end up in the right hands. For example, clients who are not relying on certain IRAs for income in retirement should consider treating the account as a “Stretch IRA,” helping extend its tax-deferred income benefits to future generations. Not having the proper beneficiary designations undermine these types of strategies.
Download our Stretch IRA investor education piece and IRA Checklist to assist during conversations with clients.
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