However, it also changes the withdrawal rules on inherited "stretch IRAs
," which may impact retirement and estate strategies.
From trusts to life insurance to stretch IRAs
, mastering estate planning maneuvers such as these opens doors for advisors in the mainstream boomer market.
Among the popular loopholes that will be addressed, he predicted, will be the tax-free inheritability of stretch IRAs
and 401(k)s, requiring that Roth IRAs be subjected to a required minimum distribution rule and treating all distributions from S corps and partnerships as ordinary income subject to income tax.
This graduate-level designation is conferred upon candidates who complete a one-year educational program focusing on fixed-income instruments, retirement and financial planning, taxes, Social Security, withdrawal plans, stretch IRAs
, and reverse mortgages.
He talks about stretch IRAs
and stretch Roth IRAs, which allow people to pass on their money to the next two generations.
Offer educational classes to those nearing retirement on issues related to Social Security, stretch IRAs
, and other pertinent subjects.
Topics include: earned income, IRA deductions and distributions, self- directed and stretch IRAs
, excess contributions, vesting rules for 401(k)s, transfers, health savings accounts, and unmarried and same- sex couples.
Therefore, it's important to recognize that stretch IRAs
have built-in disadvantages.
Some of the common strategies offered by professionals include charitable planning, stretch IRAs
and capital transfer strategies.
The proposal is also stirring up another constituency, supporters of so-called "stretch IRAs
." These are instruments whereby retirement account owners name their children or grandchildren beneficiaries of their IRAs or Roth IRAs and these young heirs can stretch out withdrawals over their own projected lifespans, enjoying potentially decades of extra tax deferred (or in the case of Roths, tax free) growth.
For more on IRAs, see: Stretch IRAs
will likely lose estate planning appeal Traditional IRAs top retirement savings accounts How to use an IRA as a wealth transfer tool
(41) Under current law, once a beneficiary inherits an IRA, the beneficiary can generally take distributions over the beneficiary's expected lifetime; (42) a "stretch IRA
" is the name for this life expectancy extension.