Stretch Out Your IRA
If you don’t expect to deplete the assets in an IRA during retirement, then it’s a good idea to determine the most efficient way of transferring the account balance to your heirs in a manner that preserves the account’s tax-deferred growth potential for as long as possible. For many Americans, transferring wealth with a multi-generational stretch IRA can be an ideal solution. By naming a younger individual as the beneficiary, he or she will be able to stretch the life of the IRA by making (smaller) required withdrawals based on his or her (longer) life expectancy. With a “stretch IRA” strategy, more money can then remain in the IRA with the potential for continued tax-deferred growth. For those who do not currently have any IRA beneficiaries, the stretch technique could provide significantly greater long-term benefits than simply allowing the account balance to be paid out to your estate as a taxable lump-sum distribution. […]
