CONTINUE IRA TAX DEFERRAL AFTER YOUR DEATH

Tax Deferred Over The Whole Lifetime Of Your Heirs

The Stretch IRA.This option is a custom IRA account and plan called, "Stretch IRA Plan". Stretch planning is the utilization of an income tax benefit which is provided by federal tax law for heirs of retirement plans. The planning applies to tax deferred Traditional IRAs only, and is not applicable to Roth IRAs since distributions from a Roth are non-taxable. Stretch planning for Traditional IRAs allows tax deferral to continue after your death, often for many decades, spread over the lifetimes of your children or other heirs.

If you leave a significant sum in your IRA after your death, your non-spousal IRA beneficiaries will, in almost every case, take a lump sum distribution of their share of the IRA. This distribution will be immediately taxable. A large lump sum will likely push these beneficiaries into the highest income tax bracket for that year and on that large amount for both federal and state income taxes.

The American Estate & Trust (AE-Trust) Stretch IRA Plan, operating under specific federal tax law, provides for each heir to take a lifetime payment stream instead of a lump sum. This is very similar to the required minimum distributions which you must take (which must start no later than age 70-1/2 in your case). The Stretch IRA Plan normally allows the IRA beneficiaries to pay taxes at lower rates, probably much lower, because their yearly income from your IRA remainder is a much smaller amount than a lump sum payment after your death. These smaller annual payments usually allow beneficiaries or heirs to remain in a lower tax bracket.

But possibly the biggest tax benefit of stretch planning is that all money remaining in each heir's share of the IRA will continue to receive tax deferral treatment for on-going earnings in the plan, also spread out over the heir's lifetime. Thus stretch planning will often keep the heir in lower tax brackets while allowing the IRA to continue growing tax deferred.

The amount of taxes saved with a Stretch IRA, when spread over an heir's lifetime, can be huge and provide a nice supplement to the heir's pre and post retirement income.

Important Estate Tax Exemption Benefit: Note that any Stretch IRA amounts which you leave directly to children or other heirs besides your spouse, will benefit from your estate tax exemption. But your estate tax exemption will be lost, will not benefit, any IRA amount which you leave to your spouse and which he/she does not spend before his/her death. If you order a Stretch IRA from AE-Trust you will be able to sub-divide, as you choose, the remainder of your IRA among your spouse (if any) and your children or other heirs.

For More Detail: Click on the "Articles" link on the left side of this page, then click on "Stretch IRA & Related Beneficiary PlanningF.

For A Stretch IRA Illustration: Click on the "IRA and Retirement Calculators" link on the left side of this page, then click on "RMD & Stretch IRA Calculator" (we suggest that you read the above article also). Allow plenty of time for calculator download.

To Order the Stretch IRA Plan, download and fill out an enrollment application form for the AE-Trust Traditional IRA:
Click Here for the enrollment application form.