Stretching IRAs
- Thread starter JLP
- Start date
I heard about stretch IRAs in an investing class. If I understand it right, what it means is you and spouse put each other as beneficiary of the IRA. When one of you dies, then you put your kids on the IRA.
I could have this wrong. Maybe you put your kids on the IRA instead of your spouse, and count on them to keep the surviving spouse in coins?? The important idea is to keep Uncle Sam's greedy fingers out of it as long as possible.
I could have this wrong. Maybe you put your kids on the IRA instead of your spouse, and count on them to keep the surviving spouse in coins?? The important idea is to keep Uncle Sam's greedy fingers out of it as long as possible.
For the most part, you are correct.
With a Roth IRA, a spouse can name his or her spouse as the beneficiary. Once the spouse dies, the remaining spouse can then roll that IRA into their own. They DO NOT have to take RMDs.
The inheriting spouse can then name a child or children as beneficiaries. If set up properly, once the remaining spouse dies, the children can the split the IRA and take RMDs based on their individual life expectancies.
It is pretty cool concept.
JLP
With a Roth IRA, a spouse can name his or her spouse as the beneficiary. Once the spouse dies, the remaining spouse can then roll that IRA into their own. They DO NOT have to take RMDs.
The inheriting spouse can then name a child or children as beneficiaries. If set up properly, once the remaining spouse dies, the children can the split the IRA and take RMDs based on their individual life expectancies.
It is pretty cool concept.
JLP
For those who are interested, I have been writing about Stretching IRAs for a couple of weeks. Here's a link to all my articles:
http://allthingsfinancial.blogspot.com/2005/02/posts-organized-by-topic.html
http://allthingsfinancial.blogspot.com/2005/02/posts-organized-by-topic.html
