With more than $20 trillion passing from baby boomers to their heirs in the next 40 years1, effective beneficiary planning is essential for investors seeking to pass assets onto future generations.
A new beneficiary planning tool from Principal Funds equips financial professionals to help their clients design a personal and effective wealth-transfer strategy while avoiding large and potentially unnecessary tax bills.
We found that one in four calls coming into our Advanced Retirement Team were from financial professionals with questions about beneficiary planning, said Chad Terry, director of retirement solutions at the Principal Financial Group®. Most people designate their beneficiaries on the day they open their retirement accounts and don't think about it again. Financial professionals who understand the complexities of beneficiary planning have the opportunity to not only guide their existing clients but also grow their business.
The beneficiary planning guide for financial professionals includes tips on how to:
- Conduct a comprehensive beneficiary review using a simple checklist
- Maintain timely contact with clients
- Organize a family meeting
- Host a beneficiary planning seminar to reach a larger audience.
The guide for financial professionals to share with investors features a one-page, quick-reference chart that compares how different beneficiaries are affected by their choice of distribution when IRA assets are transferred. We receive a lot of questions on the distribution options available to different types of beneficiaries, Terry said. There are so many options to choose from, so we wanted to present the information as clearly as possible.
The guide for investors answers questions on how to:
- Properly designate beneficiaries
- Preserve assets for beneficiaries
- Manage tax-deferred growth, taxes and penalty issues.
The beneficiary planning initiative is the latest offering in the Art of the Rollover series. Financial professionals can call 800-787-1621 (800-451-5447 for Princor Registered Representatives) or visit www.principalfunds.com/beneficiaryplanning for more information.
About Principal Funds
Principal Funds is a leading provider of mutual fund solutions, with more than $59 billion2 in assets under management. Principal Funds offers global investment management, asset allocation expertise and is a retirement leader. Principal Funds is the fifth largest manager of lifecycle funds (including target-date and target-risk funds) in the industry.3 Principal Funds are sold through a nationwide network of financial professionals associated with brokerage and financial planning firms. The companies that make up Principal Funds are members of the Principal Financial Group®. For more information, visit www.principalfunds.com.
About the Principal Financial Group
The Principal Financial Group®(The Principal®)4 is a leader in offering businesses, individuals and institutional clients a wide range of financial products and services, including retirement and investment services, life and health insurance, and banking through its diverse family of financial services companies. A member of the Fortune 500, the Principal Financial Group has $308.0 billion in assets under management5 and serves some 19.0 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit www.principal.com.
Before investing, you should carefully consider a fund's investment objectives, risks, charges and expenses. Contact your financial professional, visit www.principalfunds.com, or call 800-222-5852to obtain a prospectus containing this and other information. Read the prospectus carefully before investing.
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Principal Funds, Inc. is distributed by Principal Funds Distributor, Inc., member of the Principal Financial Group®. Principal Funds Distributor, Principal Shareholder Services, Principal Management Corporation and its affiliates, and Principal Funds, Inc. are collectively referred to as Principal Funds.
While this communication may be used to promote or market a transaction or an idea that is discussed in the publication, it is intended to provide general information about the subject matter covered and is provided with the understanding that The Principal is not rendering legal, accounting or tax advice. It is not a marketed opinion and may not be used to avoid penalties under the Internal Revenue Code. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax or accounting obligations and requirements.
1 Investment Company Institute, October 2007
2 As of June 30, 2008. Includes Principal Funds, Inc. and Principal Variable Contracts Funds, Inc. assets
3 As of March 31, 2008. Source: Financial Research Corporation Mutual Fund Lifecycle Report 1Q08
4 The Principal Financial Group and The Principal are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group
5 As of June 30, 2008