Under the SECURE Act (2019) , beneficiary designations took on added importance because the SECURE Act introduced a 10-Year Rule wherein account custodians must distribute the total amount of the retirement account within ten years.
Non-designated beneficiaries (charities, estates, and non-see-through trusts) may have only five years to distribute the account if the participant died before his or her Required Beginning Date (the 5-Year Rule).
Knowing when the 5-year rule or the 10-year rule expires for each client account is best managed in a client relationship management (CRM) system, not on a spreadsheet.
Our CRM, ProTracker Advantage®, provides an extensive and easy-to-use RMD calculator and expiration tracking tool to guide the advisor in distributing the accounts on time. The ProTracker global RMD Account Expirations screen shows the expiration date and the method of calculation for each account under the 5-year or 10-year rule.
Tax rates come into play as distributions are made. Documenting the distribution decisions in the CRM is of paramount importance so that the advisor can readily review the client's plan before each client meeting.
Learn more about calculating RMDs and documenting them.