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 ?
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.
Make sure to speak with a Gilman Ciocia tax advisor regarding Roth IRA conversion opportunities and whether a Roth or Stretch IRA is right for you.
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.
Some financial institutions still restrict beneficiary options in their IRA custodial agreements or annuity contracts and might not allow the stretch IRA, so it's wise to check those details.
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.
The new version makes it easier for planners to illustrate how life insurance improves the continuation of stretch IRA strategies, which promotes the sale of IRA rollovers and new life insurance.
Of the sixteen firms we follow, six fail to provide anything regarding estate planning, beneficiaries, Stretch IRA products or other legacy-related issues," said Alan Maginn, Senior Analyst at Corporate Insight and author of the Mutual Fund Monitor-Advisor report.
For example, the Alert points out a number of assumptions used to project stretch IRA returns that may not be realistic for an IRA purchaser over a period of many years, such as: