If you’ve been staying on top of retirement news over the past 12 months, then you’ve probably read about the passage of the SECURE Act and it’s termination of the stretch IRA as an estate planning tool. Just a quick refresher, but a stretch IRA was an IRA inherited by a beneficiary in which the beneficiary then took required minimum distributions (RMDs) according to his/her life expectancy and not that of the original IRA owner. If the IRA was inherited by a young beneficiary, that meant the funds could grow, possibly over decades, before the inheriting beneficiary reaches 72 and Continue reading The Stretch IRA is Dead. Does That Mean More Freedom?
Are you debating whether to rollover a 401(k) you may have into an IRA? There are many reasons to do so. One reason that doesn’t get talked about often is the potential estate planning benefits that such a move can produce. This is where a “stretch IRA” comes into play. The IRS allows a non-spouse beneficiary, such as children or grandchildren, to extend the distributions of an inherited IRA over his or her life expectancy. This means that the IRA can grow, tax-deferred, for possibly decades. The “stretch” option is primarily connected with IRAs, however, the IRS does allow the Continue reading Using an IRA in Estate Planning