Stretch That IRA

It's an exercise in good estate planning. Here's how to pass your savings along to your heirs

It may seem like a contradiction, but there is a way to leave a lot of money to your heirs even if you're not rich. Individual retirement accounts (IRAs) were established to let you save tax-deferred until age 70 1/2, after which you were required by law to begin withdrawing funds. But new rules define how you can pass on your wealth for two generations and reduce the amount you must take out. Called a stretch IRA, this new version has become a popular estate-planning tool.

"Stretch" is a bit complicated, but at its heart is the miracle of compounding. Over...

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