For many clients, qualified-plan assets, such as those in a 401(k) or similar plan, are an important part of their plans for retirement. One decision clients often face is what to do with their qualified-plan assets when they leave their employers.

Eventually, most qualified-plan assets will be used as a resource to produce income in retirement.

As a financial professional, you can help clients determine IRA rollover opportunities based on their age milestones and retirement-planning circumstances. When evaluating whether or not an IRA rollover may be in the client’s best interest, here are two questions to consider:

1. What is your client’s age?
2. What are your client’s circumstances?

The following three age milestones will help you identify a client’s circumstances and evaluate whether an IRA rollover may be an appropriate option to consider.

Younger than Age 59½

Before a client reaches age 59½, he/she may not have thought about his/her IRA and employer-sponsored plan and might be cautious about the possible additional 10% federal tax for distributions during this time of life. However, there are some strategies a client might consider.

Ages 60 to 70

In this age range, a client may be thinking about when to start retirement and how to make managing his/her sources of retirement income as simple and substantial as possible. The following strategies may help.

¹During the first two years after an employee’s SIMPLE IRA is established, assets should not be rolled over or converted to any type of retirement account except another SIMPLE IRA. If distributions do not meet this two-year rule, they will be subject to an additional 25% federal tax.

Older than Age 70

If the circumstances are right, even a client older than age 70 may benefit from a rollover. The strategies involved depend on whether the client is more concerned about his/her own income needs versus leaving a legacy for beneficiaries.

Additional Factors to Consider

Some employer-sponsored qualified plans may allow penalty-free withdrawals starting at age 55 and generally have unlimited protection from creditors under federal law. Also, fees, expenses, and services may differ between employer-sponsored qualified plans and IRAs.

Please be sure to follow your broker/dealer’s procedures and guidelines with regard to IRA rollovers.

This material is provided for informational purposes only and should not be construed as investment, tax, or legal advice. Information is based on current laws, which are subject to change at any time. Clients should consult with their accounting or tax professionals for guidance regarding their specific financial situations.

For more information on retirement-planning strategies, please contact the Retirement Strategies Group at (800) 722-2333, or email us at RSG@PacificLife.com.