Naming the Right Beneficiary

By SunAmerica Asset Management Corp.

The Stretch IRA strategy offers investors the opportunity to create multi-generational wealth

You can build a legacy that lasts by choosing the right beneficiary, withdrawing only the minimum required distributions every year and allowing the maximum amount of IRA assets to grow tax deferred for decades.

The length of time an IRA can be stretched depends on:Text Box: STRETCH TIP: Schedule a Beneficiary Checkup Review your beneficiary designations with your financial advisor and make sure they are accurate and consistent with your estate plan.

  • Who the beneficiary is: The stretch option is not available to certain non-individual beneficiaries, such as estates or charities.
  • How long the beneficiary expects to live: The younger the beneficiary, the longer the potential distribution period.
  • What the IRA custodian allows in the plan documents: Even though the IRS allows the stretch strategy in all IRAs, the custodian may not permit it. That’s why it’s a good idea to check the IRA Custodial Agreement to ensure that the income can be extended over the life expectancy of the beneficiary.

 

You can lose the stretch option by naming the wrong type of beneficiary!