Extended IRA


DEFINITION of 'Extended IRA'

An IRA that allows a second generation beneficiary to continue to distribute the assets over the life expectancy used by the first generation beneficiary, thereby extending the IRA.


An individual who inherits IRA assets from the original IRA owner is referred to as the first generation beneficiary. This individual is able to distribute the assets over his or her life expectancy or the remaining life expectancy of the IRA owner. If the first generation beneficiary subsequently dies, his or her designated beneficiary is the second generation beneficiary. This type of IRA is used by those who no longer need - or want - to spend all of their IRA assets at the same time. Extended IRAs can have extensive tax benefits because second generation beneficiaries are allowed to continue distributions over the life expectancy used by the first generation beneficiary, thereby spreading the tax burden from distributions over a long period.

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  1. When can catch-up contributions start?

    Most qualified retirement plans such as 401(k), 403(b) and SIMPLE 401(k) plans, as well as individual retirement accounts ... Read Full Answer >>
  2. Who can make catch-up contributions?

    Most common retirement plans such as 401(k) and 403(b) plans, as well as individual retirement accounts (IRAs) allow you ... Read Full Answer >>
  3. Can you have both a 401(k) and an IRA?

    Investors can have both a 401(k) and an individual retirement account (IRA) at the same time, and it is quite common to have ... Read Full Answer >>
  4. Are 401(k) contributions tax deductible?

    All contributions to qualified retirement plans such as 401(k)s reduce taxable income, which lowers the total taxes owed. ... Read Full Answer >>
  5. Are 401(k) rollovers taxable?

    401(k) rollovers are generally not taxable as long as the money goes into another qualifying plan, an individual retirement ... Read Full Answer >>
  6. Are catch-up contributions included in the 415 limit?

    Unlike regular employee deferrals, catch-up contributions are not included in the 415 limit. While there is an annual limit ... Read Full Answer >>

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