NASD Issues Investor Alert on Stretch IRAs

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NASD Issues Investor Alert on Stretch IRAs

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By Mark J. Astarita, Esq.  


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NASD Issues Investor Alert on Stretch IRAs.

August 10, 2001 – in the section of its web site labeled “Investor Alerts” the NASD has issued a warning regarding so called “stretch IRAs”. A stretch IRA stretches the period of tax deferred earnings of assets within an IRA beyond the lifetime of the person who set up the IRA, typically over multiple generations. In other words, they would allow you to pass your IRA down several generations to your grandchildren. Because there is so much time for the investments in the IRAs to grow at a compounded, tax-deferred rate, the potential payouts are sometimes portrayed to be multimillion dollar amounts.

The NASD is concerned because the assumptions underlying a stretch IRA often include 90 year growth periods, as well as ssumptions that the funds will never be needed, beneficiaries live normal life spans, no inflation, etc.

The NASD Release is available online at http://www.nasdr.com/alert_07-01.htm

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Nothing herein is intended as legal or financial advice. The law is different in different jurisdictions, and the facts of a particular matter can change the application of the law. Please consult an attorney or your financial advisor before acting upon the information contained in this article.  


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Copyright 2010. VGIS Communications LLC. All Rights Reserved. VGIS Communications, LLC – 41 Watchung Plaza, Suite 249, Montclair, New Jersey 07042 – 973-509-7333. Nothing herein is intended as legal or financial advice. The law is different in different jurisdictions, and the facts of a particular matter can change the application of the law. Please consult an attorney or your financial adviser before acting upon the information contained in this article. For additional information, contact Mark J. Astarita, Esq., a partner in the law firm of Beam & Astarita, LLC, who represents clients in a wide variety of finance related matters. Mr. Astarita can be contacted by email at astarita@beamlaw.com.
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