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The Power of the Stretch Roth IRA
The Roth IRA is an extremely valuable inheritance when viewed as
a financial investment. Few owners understand the power of these
accounts to their heirs when they are inherited as a stretch Roth
IRA. It's much more than leaving money to your heirs tax-free.
When a Roth IRA passes to the next generation, it can continue to
compound and grow tax-free just as it did during the owner's life.
Just like a regular inherited stretch IRA, a minimum required
distribution must be made from the account using the IRS table for
IRA beneficiaries.
The major distinction is that all distributions received as an
inheritance from a Roth IRA are income TAX-FREE to the
beneficiaries. Even when taken as a full distribution, all withdrawals
are TAX-FREE. BUT FOR MANY BENEFICIARIES TAKING A FULL
DISTRIBUTION IS A VERY COSTLY MISTAKE.
The value in an inherited stretch Roth IRA is that all earnings inside
the account and all distributed income is TAX-FREE to the
beneficiary. For example suppose you are a beneficiary who is very
good at investing. You inherit a $10,000 Roth IRA and turn it into
$1,000,000. The entire $1,000,000 is tax-free upon withdrawal.
If a beneficiary takes a full distribution and closes the Roth
IRA upon inheritance, they will lose one of the most valuable
tax opportunities the tax code allows, the stretch Roth IRA.
Click here for: Six Powerful Reasons For The
"Stretch" IRA
The Roth IRA is an extremely valuable inheritance when viewed as
a financial investment. Few owners understand the power of these
accounts to their heirs when they are inherited as a stretch Roth
IRA. It's much more than leaving money to your heirs tax-free.
When a Roth IRA passes to the next generation, it can continue to
compound and grow tax-free just as it did during the owner's life.
Just like a regular inherited stretch IRA, a minimum required
distribution must be made from the account using the IRS table for
IRA beneficiaries.
The major distinction is that all distributions received as an
inheritance from a Roth IRA are income TAX-FREE to the
beneficiaries. Even when taken as a full distribution, all withdrawals
are TAX-FREE. BUT FOR MANY BENEFICIARIES TAKING A FULL
DISTRIBUTION IS A VERY COSTLY MISTAKE.
The value in an inherited stretch Roth IRA is that all earnings inside
the account and all distributed income is TAX-FREE to the
beneficiary. For example suppose you are a beneficiary who is very
good at investing. You inherit a $10,000 Roth IRA and turn it into
$1,000,000. The entire $1,000,000 is tax-free upon withdrawal.
If a beneficiary takes a full distribution and closes the Roth
IRA upon inheritance, they will lose one of the most valuable
tax opportunities the tax code allows, the stretch Roth IRA.
Click here for: Six Powerful Reasons For The
"Stretch" IRA
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