Sharing New Life Events with Your Financial Advisor

As a Financial Advisor Assistant for many years, my job is to keep our client’s account up to date & process changes for them when they have certain life events. We advise & assist our client’s whose life situations change significantly and need guidance. I am also a new Enrolled Agent so I am interested in how certain events will affect the client’s tax return and we work closely with the Tax Department on this. The following are some examples of life events that a client should share with us so changes can be made as needed:

  1. Birth or Adoption of a Child – You may want to open a 529 plan to save for the child’s education. You are eligible for a state tax deduction for contributions to a 529 Plan, and earnings are tax free if the funds are used for qualified education expenses. Grandparents can also open a 529 Plan for a grandchild.  
  2. Marriage or Divorce – We will need to update any name changes on your accounts with a signed letter of instruction and a copy of the court document. You may also want to update the beneficiaries on your accounts & a signed form is always needed to make this this change.  
  3. Changed Bank Account – If you changed your bank account, we would need to update your accounts so that any systematic investments or distributions continue with the new bank. Signed forms are needed to change your bank. 
  4. Child Starting College – You will need to begin taking distributions from your 529 Plan & as mentioned above, distributions are tax free if they are used for qualified education expenses. You may also be entitled to an education credit when you file your tax return.  
  5. Change Job or Start a Business – If you switch jobs, we can help you rollover your old 401K to a Traditional IRA. There are also several types of retirement accounts if you are self-employed which we can open for you.  There are contribution limits on retirement accounts so if your income changes significantly we should know in case we need to adjust your contributions.  
  6. Retirement – If you are planning to retire in the near future you should go over the details with a financial advisor to make sure you are financially ready to retire. 
  7. Reach Age 72 – At age 72, the IRS requires that you start taking Required Minimum Distribution (RMD) from your Traditional IRA and 401K if you are no longer working for the company. The amount is based on your account value on 12/31 of the previous year and your life expectancy and will be a taxable distribution. There is no RMD on a Roth IRA.     
  8. Death in the Family – We may need to re-register an account or change your beneficiaries. In addition, if you inherit any investments, we can help you transfer the funds to your portfolio. There are different ways to handle inherited accounts and we can guide you on this.  Our Tax Departments can help you with Gift Tax and Estate Tax Returns.  

We are always happy to help you open a new account, process a rollover, make changes on your account or answer any of your questions. Feel free to call our office anytime or visit our website  Be sure to follow us on Facebook, Twitter and LinkedIn.