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Which Overlooked Milestones Matter Most to Clients?

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We are always looking for new ideas for connecting with current clients and reaching out to new prospects. Many advisors send a note or give a quick call for a birthday, but have you considered reaching out on half birthdays? It sounds strange, but in the financial world there are some important mid-year timetables you shouldn’t miss.

Besides allowing you to stand out from your competition, half birthdays give you a way to acknowledge your client on a day that is actually quite important for their financial future.

Meeting with them on a half birthday is a great opportunity to discuss some very important moments in their financial lives such as:

  • 49½ - At age 50, your clients will be able to begin catch-up contributions. Check in with them about their plans for retirement and discuss their goals. Talking to your clients on their 49½ birthday will give them time to adjust their budget and plan for their retirement, as they will soon be able to contribute an extra $6,000 to their 401(k) plans and an extra $1,000 to their IRAs (including ROTH IRAs).
  • 59½ - When your clients turn age 59½, they will be able to start taking withdrawals from their IRAs with no early withdrawal penalty tax. Review the different options with them and examine if it is better to start pulling funds now, or if they should wait until they are closer to age 65. This is also a great time to discuss the pros and cons of consolidating old 401(k) accounts for convenience and diversification. Of course, any money withdrawn is subject to ordinary income taxes.
  • 61½ - Your clients are only six months away from being able to claim Social Security benefits. As their financial planner, use this half birthday to analyze Social Security options. Consider different financial plans and assist in finding the option that works the best for them while still remembering the consequences of filing too early.
  • 70½ - Soon your clients will have to start taking the required minimum distributions (RMDs) for their tax-deferred retirement plans. Talk to them about their current and future income needs to determine: how much to withdraw, when, and from which accounts. Remind clients that they must withdraw their RMD amount to avoid IRS penalties, even if they don’t need the income. This is also a good time to revisit account consolidation to make RMDs easier, and remind them about the importance of leaving a financial legacy to heirs.

You’ll never go halfway when you make plans to celebrate your clients’ half birthday. It’s a great way to not only show that you care, but that you are vigilant about their financial future as well. Use this as a way to distinguish yourself from the crowd by acknowledging these important milestones and assist your clients in making the best financial plan.
Stacy Mercer is Director of Marketing & Strategic Initiatives at Sammons Retirement Solutions, Inc. (SRS).

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