stretch IRA

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 ?
Last fall, the Senate Finance Committee passed proposed legislation called the Retirement Enhancement and Savings Acts of 2016 (RESA), which eliminates the stretch IRA, requiring individuals who inherit IRAs to withdraw funds over the five-year period following the original owner's passing.
3 reasons to replace the stretch IRA with life insurance
For example, if a beneficiary of her father's IRA elects to take distributions over her fife expectancy (commonly called a stretch IRA payout), what portion of the annual minimum required distribution (MRD) is IRD?
The Obama budget would eliminate the stretch IRA that allows beneficiaries to stretch the proceeds from an inherited retirement account over their lifetime.
thumbs up] (3) The stretch IRA may be safe for now, but it's about time that it was eliminated IRA accounts are not meant to act as estate planning tools, they are meant to provide retirement income to the account owner.
A Stretch IRA is a tool that can increase wealth for beneficiaries over several generations.
In Michigan, effective for 2005, a new Income and Principal Act goes in affect allowing post death payments of a stretch IRA to be taxable to the beneficiary of the stretch trust.
Unless your clients are not going to be worth more than the exemption amount at the time of death and their heirs will be in the same or lower tax bracket from the time of the client's retirement until death, carefully consider whether a Stretch IRA is the best solution to maximize wealth transfer.
Stretch IRA Calculator - Analyzes the estate and income tax impact of a client's IRA at death.
Even if measures like the stretch IRA elimination don't come into effect, it won't hurt to have it.
Stretch IRA Calculator--analyzes the estate and income tax impact of a client's IRA at death.
Caution: When implementing the stretch IRA strategy, clients should keep in mind that amounts not deposited into an IRA by the applicable 60-day deadline generally are taxable as a distribution and are potentially subject to the 10% penalty applicable to distributions received by taxpayers who have not attained age 591/2 at the time of the distribution.