Year-End RMDs and Roth Conversions: Why Your CRM Should Be Doing the Heavy Lifting

As we enter the final stretch of the year, many firms discover the same problem — their team is scrambling to confirm that required minimum distributions (RMDs) and planned Roth conversions actually got done.

This is avoidable. But only if you stop relying on memory, spreadsheets, and last-minute checks — and start relying on systems.

What Custodians Make Easy — and What They Don’t

On the AUM side, custodians do a decent job.

Both Schwab and Fidelity allow you to run reports across your client base that show:

• Which clients are subject to RMDs, and
• Whether those RMDs have been satisfied at that custodian

That’s helpful — but incomplete.

What those reports do not capture:

• Inherited IRAs
• Outside accounts
• Fixed indexed annuities (FIAs)

Once you move outside standard custodial IRAs, you’re on your own.

Inherited IRAs and FIAs: Where Firms Lose Control

Inherited IRAs require annual RMDs — and under the 10-year rule, they must also be fully distributed by the end of year ten. No custodian is tracking that holistically for you.

FIAs are no better. There’s no centralized reporting. You’re logging into each carrier, client by client, hoping nothing gets missed.

Hope is not a process.

The Fix: Systematize Everything in Your CRM

This is where strong practice management shows up.

At a minimum:

• New clients: Create a future task for when they reach RMD age.
• Annual RMDs: Add a recurring CRM reminder listing which accounts require distributions.
• Inherited IRAs:
  • Annual RMD reminder
  • AND a separate reminder for the 10th-year full distribution deadline
• Roth conversions: Set an annual reminder documenting:
  • Target tax bracket
  • Percentage or dollar amount converted
  • Any constraints or planning assumptions

The goal is simple: automate the thinking so nothing relies on memory.

One Exception Worth Considering for Inherited Accounts

For annuity-held inherited assets, consider auto-RMDs where available. Many FIA carriers allow this.

Custodians like Schwab and Fidelity generally do not — which is why CRM tracking is critical.

A Critical Side Note on Roth Conversions

Many advisors assume the goal is to convert everything.

That’s often wrong.

Roth conversion strategy should account for:

• Charitable intent
• Future taxation of Social Security
• Capital gains and interest income at RMD age

For charitable clients, a smarter approach is often:

• Convert enough so future RMDs roughly match annual charitable giving
• Then use Qualified Charitable Distributions (QCDs)
• Result: money goes to charity tax-free

No reason to pay tax on dollars that were never going to be spent.

How Much Should Be Left in an IRA at RMD Age?

This is math — but the guidelines are useful.

For many single filers:

• ~$200k–$250k in an IRA at RMD age often keeps:
  • Social Security largely non-taxable, and
  • Total taxable income near or below the standard deduction

For married filing jointly:

• That number is closer to ~$500k

The takeaway is simple: Don’t convert everything. Convert enough.

The goal is often to be in the zero-percent tax bracket at RMD age — not to eliminate qualified assets entirely.

Income Riders and RMDs: Don’t Miss This

If a client has an annuity with an elected income rider, the income they receive:

• Does count toward their total RMD requirement for that category

Example:

• Total IRA RMD required: $15,000
• Income rider pays: $20,000

Result:

• No additional IRA withdrawals are required

But category rules still apply.

RMD Categories Matter More Than Most Advisors Realize

Each category of qualified money has its own RMD requirement:

• IRAs (including SEP and SIMPLE)
• 401(k)s
• 403(b)s
• 457 plans

You can aggregate RMDs within a category — but not across categories.

This is why:

• Consolidating qualified assets into IRAs simplifies tracking
• Fewer categories = fewer opportunities for errors

Let Your CRM Do What It’s Supposed to Do

Your CRM should track:

• RMD timing
• Inherited account rules
• Conversion strategy
• Recurring client transactions

If it doesn’t, that’s a process problem — not a people problem.

One Final Recommendation: Start Earlier

Strong firms don’t wait until December.

Do this work August through October.

By December:

• Your team is overwhelmed
• Custodians and carriers are slammed
• Mistakes are far more likely

Missed RMDs and botched conversions aren’t compliance issues — they’re preparation failures.

Build the system. Automate the reminders. Reduce the chaos.

That’s how well-run firms operate.