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Stretch IRA
As part of your estate plan, a Stretch IRA may help you leave a
lasting financial legacy to the people you care most about. This
strategy maximizes the flexibility of your IRA, potentially extending
the tax-deferred benefits you enjoy to future generations.
Continue or pass on tax-deferred savings for many years |
Create a financial legacy for your heirs or other beneficiaries |
Minimize income taxes on IRA distributions |
Take advantage of more flexible distribution and beneficiary
planning options than your employer-sponsored retirement plan
may permit
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A Stretch IRA takes advantage of a flexible feature of an IRA that
allows you to name successive beneficiaries. For instance, say that you
own an IRA and name a primary beneficiary, like your child. You can also
name a subsequent or successive beneficiary (or beneficiaries), such as your
grandchild, who will inherit the IRA when your primary beneficiary dies.
This flexibility allows you to potentially preserve the tax-advantaged
benefits of an IRA for your primary and subsequent beneficiary. In order
for the strategy to work, your IRA must allow for a Stretch IRA. Consult
your financial or tax advisor for more information.
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A Stretch IRA is for investors who will not need the IRA money during
their own retirement and works on the assumption that an investor will
withdraw only the minimum Required Minimum Distribution (RMD).
There can be no guarantee that a Stretch IRA strategy will be
advantageous to your specific situation, and many of its benefits are based on current tax laws,
which are subject to change.
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