stretch IRA

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Stretch IRA

An IRA designed to keep making payments to the heirs of the annuitant even after the annuitant dies. A stretch IRA is advantageous because it allows the annuitant to provide for his/her relatives without incurring the estate tax. See also: Stretch annuity.

stretch IRA

An individual retirement account in which the period of tax-deferred earnings within the IRA stretches beyond the lifetime of the person who set up the IRA. Stretch IRAs can result in huge accumulations and payouts depending on the assumptions regarding the rate of return that will be earned and the length of time funds are to accumulate.
References in periodicals archive ?
RESA also includes: a proposal to require lifetime income estimates at least annually on participants' retirement plan statements; a fiduciary safe harbor for the selection of lifetime income providers for retirement plans; limits on stretch individual retirement accounts (IRAs) that allow beneficiaries to take out retirement plan assets over the remainder of their lifetime; a proposal to allow more time for participants who terminate with an outstanding loan to roll over the loan and pay it off without it being a deemed distribution; as well as other proposals that would affect nondiscrimination rules, the automatic enrollment safe harbor default rate, and the treatment of 403(b) custodial accounts upon plan termination.