
Stretching the Benefits of an Inherited IRA
You've worked hard to grow your IRA for a secure retirement. But what happens to your savings when you don’t use all your funds? With thoughtful planning, you can pass on your IRA in a way that helps your loved ones, allowing them to continue tax-deferred growth and extend financial security for generations.
Building a Strong Financial Legacy is as Easy as 1, 2, 3
- Choose your primary and secondary beneficiaries carefully.
- If your spouse is the primary beneficiary, they can re-register the IRA in their name and stretch distributions over their lifetime.
- If a non-spousal beneficiary inherits the IRA, they typically must withdraw the full amount within 10 years—but they can choose annual, periodic, or lump-sum distributions.
Note: Some non-spousal beneficiaries—such as minors, disabled individuals, or those not more than 10 years younger than the original owner—may qualify for a life expectancy-based distribution instead of the 10-year rule.
How a Stretch IRA Works
Let’s look at an example of how an IRA can benefit multiple generations1:
Ed (Original IRA Owner) |
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Mary (Spouse & Primary Beneficiary) |
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Jim (Son & Secondary Beneficiary) |
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Smart Planning for a Bigger Financial Legacy
By strategically naming a spouse as the primary beneficiary, who then designates their own primary beneficiary, both heirs benefit from tax-deferred, compounded growth. Over 48 years, this approach helps an IRA grow to $2,104,820, benefiting three generations.
Making the Right Choice
With the right strategy, you can ensure your beneficiaries maximize their inheritance and continue growing their wealth for years to come.
1Example assumes a 6% return and a combined tax rate of 24%. RMD amount calculated is pretax. Depending on your product, contingent deferred sales charge (CDSC), market value adjustment (MVA), and other product charges may still apply upon withdrawals.
Additional Topics
![]() What you need to know about Inherited IRAs | ![]() What you should know about Required Minimum Distributions (RMDs)Required Minimum Distributions, or RMDs, are minimum amounts you must withdraw annually from your tax-deferred retirement account. We cover the ins and outs of RMDs. |