Stretch IRA strategy is applicable only for those who don’t need to withdraw the full balance of the Individual Retirement Account (IRA). Those people, who want to delay distributions from the IRA account and defer tax payments, tend to apply this estate planning concept.This strategy allows the beneficiary of an Individual Retirement Account to push the benefit to his next generation by forgoing current withdrawal. So, the account balance keeps growing for long times and keep generating tax-deferred savings.But IRS has set rules so that you must withdraw a minimum amount of money mandatorily. This is also the smallest amount of dollar you need to withdraw without paying any penalty. But delaying is not certainly the profitable options as the Federal and State tax rate is supposed to increase over the time.If you have your spouse as the beneficiary of the account:
If you have chosen your spouse as the beneficiary of the IRA account, the RMD amounts will be withdrawn by you till you are alive. After your death, the IRA is rolled over to your spouse’s IRA.
If your beneficiary is not a spouse:
If the beneficiary is someone (group of people) other than your spouse, the rule is almost same except the beneficiary will be able to withdraw from the IRA based on the oldest beneficiary’s life expectancy.