Who Can Still Do a Stretch IRA after the SECURE Act: Explaining the Exceptions to the Rule
Much has been written about The Secure Act since it went into effect on Jan. 1, 2020. One popular topic has been the exceptions to one of the act’s primary changes, eliminating the use of so-called stretch IRAs for most non-spouse beneficiaries.
IRA owners are allowed to name anyone they desire as recipients of separate shares of their IRAs. Before Jan. 1, each of these beneficiaries was required to take a minimum distribution each year that was designed to exhaust the IRA share over his or her life expectancy.
Typically, such beneficiaries would exhaust that IRA much sooner, but as an income tax strategy, it did allow for lengthy income tax deferral if the beneficiary were so inclined.
