Preservation effort – A “stretch IRA” can maximize your IRA’s benefits

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Abstract: Structuring an IRA as a “stretch IRA” can preserve its benefits for many years — and can benefit both one’s estate and retirement plans. This article takes a closer look at the ins and outs of stretch IRAs, showing how the beneficiary can enjoy tax advantages by having distributions based on his or her own, presumably longer, life expectancy, rather than the distribution period that applied to the deceased. To avoid having the beneficiary immediately empty the account — thus defeating the purpose of a stretch IRA — a “conduit trust” can be set up.