Stretch Individual Retirement Account financial definition of Stretch Individual Retirement Account
stretch IRA (redirected from Stretch Individual Retirement Account)
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.
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.