Producer Training IRA Playbook

PRODUCER TRAINING
IRA PLAYBOOK
START
Life Insurance Company of the Southwest®
LR12965(0215-) For Agent Use Only – Not For Use With The Public
Cat No 69705 (0215)
Producer Training
IRA PLAYBOOK
National Life Group has created this Producer
Training Playbook to help producers looking for
opportunities to sell individual and business
IRA solutions in the retirement market.
The Playbook has been designed to provide
you with information that gives you a working
knowledge on each of the individual and business
IRA solutions and tips on what a top prospect
looks like. The pre-approved consumer marketing
materials are intended to help you open doors
to conversations with new and existing clients.
Financial security in retirement doesn’t just happen. It takes
planning and commitment and, yes, money. Savings matters!
Two things make saving for a lifetime important. Simply, the
first is making sure that money will last a lifetime. And the
second is knowing how much is needed to live the retirement
one desires.
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With an IRA from National Life Group, clients can build a
sound, long-term retirement strategy to help them realize
a financially independent tomorrow.
For Agent Use Only – Not For Use With The Public
INDIVIDUAL
Help clients choose an IRA Solution
from National Life Group
BUSINESS
TOOLS
2015 Calendar Year
Qualified Plan Limits
PLAN
Traditional IRA
For clients seeking a
tax deduction and
tax deferred growth.
Roth IRA
For clients
seeking tax free
retirement income.
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SEP IRA
For small business owners
that want to offer a
retirement benefit and
receive a tax credit.
Simple IRA
For a business with
less than 100 employer that
want to offer a pre-tax
savings plan and receive
a tax credit.
FORMS
401(k), SAR-SEP
403(b) Elective
Deferral Limit
PLUS: Age 50 & Over Catch Up
SIMPLE Plan Elective Deferral Limit
PLUS: Age 50 & Over Catch Up
457 Plan Elective Deferral Limits
PLUS: Age 50 & Over Catch Up
Defined Benefit Plan Maximum Benefit
Defined Contribution Participant
Maximum Allocation
Roth/Traditional IRA
PLUS: Age 50 & Over Catch Up
2015
LIMIT
$18,000
2014
LIMIT
$17,500
$6,000
$12,500
$3,000
$18,000
$6,000
$210,000
$53,000
$5,500
$12,000
$2,500
$17,500
$5,500
$210,000
$52,000
$5,500
$1,000
$5,500
$1,000
2015
$98,000
$61,000
$183,000
2014
$98,000
$60,000
$181,000
If Covered by a Plan at Work
Adjusted Gross Income (AGI) Limit for
Maximum Deduction for Traditional IRAs
Joint Filers (Both have plan)
Single Filers (Head of household)
Joint Filers Non-Active Participant
(One filer has plan)
Modified AGI Limit for Maximum Contribution for IRA
Joint Filers
$191,000 $181,000
Single Filers
$129,000 $114,000
For Agent Use Only – Not For Use With The Public
INDIVIDUAL
BUSINESS
TOOLS
The Traditional IRA
Traditional IRAs offer two distinct advantages in terms
of taxes: potential deductibility of contributions and
tax deferral on investment earnings.
General Guidelines for a Traditional IRA
• Earned income in prior tax year.
• Under age 70½.
• Contribution deductibility dependent on participation in an employer
sponsored plan and AGI (taxes paid at time of distribution).
• Required Minimum Distributions must start at age 70½.
TOP PROSPECT
• A client that wants to save for retirement
in a tax deferred vehicle
• A client that needs a tax deduction and
whose income does not exceed IRS limits
for qualification
• A client that anticipates their retirement
income tax bracket to be lower than
their current tax rate
• Someone who has maxed out their
contributions to their employer
sponsored plan
• A non-working spouse
• An individual whose employer doesn’t
offer an employer savings plan
• A client that wants to have access for
unusual financial circumstances like
first home purchase or certain
medical expenses
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For Agent Use Only – Not For Use With The Public
FORMS
INDIVIDUAL
BUSINESS
TOOLS
The Roth IRA
The Roth IRA presents a potentially attractive
alternative to the Traditional IRA because it may
allow a client to avoid future taxation of retirement
funds by making nondeductible contributions now.
General Guidelines for a Roth IRA
• Earned income in prior tax year.
• Contributions are not tax deductible.
• Contributions can only be made if income is below specific
guidelines set forth by IRA(See Publication 590).
• Contributions can continue after age 701/2.
• No Required Minimum Distributions(RMDs).
TOP PROSPECT
• A client looking for tax free withdrawals
at retirement
• A client anticipates their retirement income
tax bracket to be higher than their current
tax rate
• Someone who has maxed out their
contribution to their employer
sponsored plan
•A
non-working spouse
• A client is looking to make a first home
purchase in 5+ years
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For Agent Use Only – Not For Use With The Public
FORMS
INDIVIDUAL
BUSINESS
TOOLS
Why Convert to Roth IRA?
Tax savvy investors want to pay as little income tax as possible.
Converting to a Roth IRA allows them to make smart tax moves that may
save money in the long run. A top prospect is a client that believes that
taxes will be higher during retirement than today and therefore is willing
to pay taxes today for a tax-free withdrawals tomorrow.*
Converting to a Roth IRA may guarantee that a client will owe no
additional income tax on the converted funds during retirement and not
pay taxes on the interest earned if the Roth IRA qualifications are met.
Roth IRA Guidelines
• Taxes due on all converted money in the year of the conversion.
• Any Traditional IRA can be converted to a Roth IRA regardless
of client income.
• No 10% early withdrawal IRS penalty if the funds move from
the Traditional IRA to the Roth IRA in a 60 day window.
• Contributions may be made to the converted Roth IRA if
income limits are not exceeded.
* Refer to and follow Roth IRA Guidelines.
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For Agent Use Only – Not For Use With The Public
FORMS
INDIVIDUAL
BUSINESS
TOOLS
The SEP IRA
Simplified Employee Pension (SEP) IRAs are a popular
employer plan for self-employed individuals and smaller
sized business owners. They offer significantly higher
contribution limits than other IRAs while possibly
providing significant tax deductions.
General Guidelines for a SEP IRA
• Must contribute same percentage of pay for all employees.
• Can contribute the less of 25% of compensation or $53,000 for 2015.
• All policies are owned by the employees; employer has no control over
contributions made in the Plan.
• No vesting schedule.
TOP PROSPECT
• A business owner needing a significant
tax deduction
• A business owner looking for flexibility
in making a contribution to the Plan
• A business owner wanting a retirement
plan for themselves and their employees
• A business owner wanting a Plan that
is simple to establish
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For Agent Use Only – Not For Use With The Public
FORMS
INDIVIDUAL
BUSINESS
TOOLS
The SIMPLE IRA
The Savings Incentive Match Plan for Employees (SIMPLE)
IRA gives employers an easy way to make contributions
toward their employees’ retirement.
General Guidelines for a SIMPLE IRA
• For employers with less than 100 employees.
• Program primarily funded by elected pre-tax employee contributions.
• Employer required to make contributions
- Flat 2% for all eligible employees or
- Up to 3% for employees who make contributions
• All policies are owned by the employees; employer has no control
over contributions made in the Plan.
• No vesting schedule.
• If employee withdraws money within 2 years of first entering the plan,
there is a 25% early distribution penalty.
TOP PROSPECT
• A business wanting to offer a pre-tax
retirement savings plan for employees
• A business looking for a tax deduction
business expense
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• A business that does not currently
offer any other employer-sponsored
retirement plan
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For Agent Use Only – Not For Use With The Public
FORMS
INDIVIDUAL
BUSINESS
TOOLS
FORMS
Individual
Business
Fliers
• Traditional vs. Roth IRA Advantages
and Disadvantages
• SEP IRA flier
• Qualified Plan Limits
• SIMPLE IRA
• Publication 590, Individual Retirement
Arrangements (IRA)
• What are the differences between
a Roth IRA and a Traditional IRA
• SIMPLE IRA Checklist
• Are you saving enough Roth IRA email
• We make saving SIMPLE email
• A tax deductible saving solution
just for you Traditional IRA email
• We help you get access SEP email
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For Agent Use Only – Not For Use With The Public
• IRA Deduction Limits
• Retirement FAQs for IRAs
• IRA Year End Reminders
INDIVIDUAL
BUSINESS
TOOLS
How to Establish an IRA
Traditional IRA – No additional forms required.
Just submit the application for processing.
Roth IRA – No additional forms required.
Just submit the application for processing.
SEP-IRA – No additional forms required.
Just submit the application for processing.
SIMPLE-IRA – Use the SIMPLE-IRA Set Up Forms
and submit with an application for processing.
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SIMPLE–IRA Set Up Forms
• Employer Information For Retirement Plans
Form No. 4258E
• Savings Incentive Match
Form No. 5304-SIMPLE
• Salary Reduction Simplified Employee Pension
Form No. 5305A-SEP
FORMS