IRS green lights new Roth IRA rollovers regulations


Last week, the Internal Revenue Service provided guidance that permits employees to roll over their after-tax contributions directly into a Roth IRA, tax-free. This ruling applies to rollovers from 401(k), 403(b) or 457 plans. 

You can read Notice 2014-54 “Guidance on Allocation of After-Tax Amounts to Rollovers” at

The notice states: “The applicability date of the regulations is proposed to be Jan. 1, 2015. However, in accordance with § 7805(b)(7), taxpayers are permitted to apply the proposed regulations to distributions made before the applicability date, so long as such earlier distributions are made on or after Sept. 18, 2014."

Here’s an example of how it would work:

Retirement Plan Account Value: $200,000

  • Pre-tax Amount $150,000
  • After-Tax Amount $50,000

Total Distribution: $200,000

  • Tax-free rollover to traditional IRA: $150,000 
  • Convert tax-free to Roth IRA: $50,000


  1. Check in with clients to determine if they have after-tax money in their retirement plans, and if not, see if they can make such contributions. Not all plans are created equal – you will need to check the plan document for rules on after-tax contributions.

    Your clients can benefit from tax-deferred savings on money that's already been subject to income taxes and then convert it to a Roth IRA upon distribution. This will generally apply to higher income clients who can afford the larger contributions, but because of their income they are likely ineligible to make annual contributions to a Roth.

  2. Clients over 59 ½ with after-tax contributions in their retirement plans can take advantage of non-hardship in-service withdrawals and roll both pre- and post-tax contributions into traditional and Roth IRAs.

  3. Last but not least …. What’s better than tax-free retirement income? Tax-free retirement income guaranteed for life! If your client or prospect’s Roth IRA will be a source of retirement income (as opposed to a way to pass this wealth tax-free to children or grandchildren), doesn’t it make sense that this income should last as long as the client and their spouse live? An annuity may be the answer

    No one product is the best fit for all situations. At Ash Brokerage, we can offer a wide variety of lifetime income solutions from top-rated carriers to meet your clients’ unique needs. Contact your RVP or internal wholesalers to learn more about this opportunity.

Looking for the pothole around the corner


After the harsh winter of 2014, many streets were left with large and encompassing potholes. In my hometown, the city had to repave a stretch of a major downtown street because it was essentially impassable. With the Farmer’s Almanac predicting an even a worse winter for 2015, we’re already talking about the storms and havoc heading our way. 

Unfortunately, we as financial advisors don’t heed the same warnings, and we’re positioned to repeat the same mistakes of the past. Today, many signs point to a market correction – a potential healthy correction of 10 percent or less. While it appears to be smaller than the financial crisis of 2008-09, it nonetheless will take trillions of dollars from investors. 

Given that our clients are five to six years closer to retirement from last major correction, it should be more imperative to protect their wealth. Unfortunately, I continue to hear advisors satisfied with their clients’ account values and assets under management going up without regard to risk and the opportunity to mitigate those risks.  

With today’s product portfolios, many advisors miss the opportunity to lock in gains from existing accounts, especially retirement accounts. I would estimate that 50 percent of our clients would like to take the gains from the last five years off the table and make sure they don’t repeat the claw back they experienced in 2008-09. 

While fixed annuity returns remain low, the risk associated with a potential market correction would outweigh the loss in account value. Look at your client base. Which ones called you the most or came to you as a new client during the last correction? Talk to them about their interest in taking some of their gains off the table. You’ll be looking out for their potential pothole around the corner.

The Bottom Line: Many clients have recovered from the financial crisis five years ago, and they’d like to protect what they’ve gained. Contact them now to help take those gains off the table.   


Annuities Retirement Market

Build momentum – change the game


As I was driving home from a recent trip, I listened to an NFL broadcast. It was so good to pass the time with a football game instead of music for once. Anyway, what struck me during the 3.5-hour drive was how many times the momentum changed during the game. You could hear it in the home team’s announcers and sense it as one positive play built on another.

In sales, much like football, momentum can change at a moment’s notice. In football, momentum usually comes from a big play – a turnover, a big run, or a successful long pass. The players’ confidence builds, and more big plays tend to follow. 

In sales, why not control our momentum with big plays? When we’re working on a lot of cases or have ones that we can dig our teeth into, we seem to have more momentum to call clients, bring up possible solutions or convey confidence in our proposals. How do we hold on to that momentum? With focus.

I encourage you to focus on one big play – one idea or strategy. Give it laser focus for the rest of the year. Laser focus means that you own the idea and can tell the story backwards and sideways, you have a defined target market to share the idea with, and you have the support to execute the idea with ease and confidence. When you’re laser focused, you should definitely see a shift in momentum. 

We have to change the momentum in our business. Life insurance ownership remains at industry lows, we continue to look the other way when it comes to protecting wealth from potential market corrections, and we fail to address the 93 percent of Americans who continue to self-insure their long-term care contingent liability. Focus on one idea – one game-changing play – that can propel you for the rest of the year and springboard you into 2015.

The Bottom Line: It just takes one idea or one sale to change the momentum in your business. Find the big play closest to your heart and run hard with it! Be a game-changer for the industry. 


Annuities motivation sales

Numbers are telling a new story


Our industry story used to read something like this: Markets are up and so are variable annuity sales or rates are up and so are fixed annuity sales. Today, it’s the opposite: The market is up while variable sales are down, and rates are down while fixed annuity sales are up. 

The numbers don’t lie. A recent LIMRA Secure Retirement Institute report showed total fixed annuity sales up 34 percent from last year, while variable annuity sales fell 5 percent. Fixed indexed annuities set a new quarterly record of $13 billion, up 40 percent over sales last year, capturing 52 percent of the total fixed annuity sales for the first time ever.  

It appears this is a new twist on our old story. So when I first saw this data, I asked many questions:

  • With rates so low and the market on the rise for nearly five straight years, who would possibly be interested in a fixed annuity? 
  • Why aren’t variable annuity sales through the roof?
  • Do the sales of the advisors I work with fall in line with these numbers? 
  • Is this the start of a real trend? Or is this just another fad in the financial services industry?  

Let’s review a couple of basic truths to see if we can reveal some answers.

  • The aging population still doesn’t feel safe in the market. 
  • Even after a prolonged attempt by the Fed to force investors into riskier assets, there’s still nearly $10 trillion on the sidelines in the form of CDs and money market accounts.
  • Added to the $3.5 trillion in short-term bond funds, we have nearly the same amount of money in safe asset classes (earning less than 1 percent per year) as we have in 401(k)s and IRAs combined.

In talking with the advisors I work closely with, I’ve come to realize that their numbers do in fact fall in line with the LIMRA numbers, and many of them are having their best years ever. They’ve embraced the concept that some people are investors while others are savers. Savers will never become investors, no matter how hard the Fed pushes, and they’re starved for safe alternatives. Advisors who are truly listening to the desires of the savers say they’re having a real impact on their business and their clients.

Is it a fad? Well, most fads have faded out after five to 10 years, and this movement just seems to be getting started. In fact, it looks like it could go parabolic over the next decade, especially as many of our investors look to become maintainers. So I guess the real question is: If you’re not making fixed and fixed indexed annuity sales to your clients, then who is?

Call us at (800) 589-3000 – we can help!


Annuities Retirement

Summer’s almost gone … but opportunities remain


Throughout the summer, we’ve shared information and ideas on the complacency bubble, opportunity cost (otherwise referred to as cost of waiting), clients in transition, income generation and a plethora of other topics to encourage you to change your behavior, along with your clients’ behavior. We think we’ve presented some compelling ideas and data that have the potential to enhance your financial practice and help you manage client expectations. 

Throughout our dialogue, the market has continued to march upward, unabated by domestic and global issues that have developed. It seems almost unstoppable, but we know it can’t continue this trend indefinitely. Many advisors continue to choose the path of least resistance, and we see huge amounts of inflows continuing weekly into mutual funds, equities and bonds. I encourage you to keep positioning annuities for some of your clients where appropriate. 

Though there are many client scenarios for which you should consider using annuities, here are four prevailing ones that you’ll likely encounter:  

  1. Clients in your book of business over 59 ½ and still working: Discuss in-service withdrawals with them

  2. Clients within five years of retirement who are still fully invested in the market: Think about starting to lock in those returns with an indexed annuity

  3. Clients who have part of the $10 trillion sitting on the sidelines, waiting for advice: Consider alternatives such as single-premium deferred annuities or fixed index annuities

  4. Clients who have portfolios in need of risk reduction: Possibly reduce exposure to interest rate risk with a fixed index annuity

As we ramp back up from summer mode into what is generally the best third of the year, what type of advisor do you want to be? Are you the one who makes it happen, the one who lets it happen, or the one who says, “What happened?”

Let Ash Brokerage be your partner. We’ll help you make it happen.