Extended IRA

Categories: Retirement and Pension,

An individual retirement account (IRA) that allows a second generation beneficiary to make distributions based on the life expectancy of the first generation beneficiary. The first beneficiary has the option of taking distribution based on his/her life expectancy or that of the original owner. If the first beneficiary should die while taking distributions, the second beneficiary then has the option of taking distributions on the same life expectancy schedule as the first beneficiary. This means that he/she does not have to distribute as much. This extends the life of the IRA and lessens the amount of taxes owed as a result of the distributions.