Do you have a question about your financial affairs? Financial planning consultant, Robert S. Pennartz, CFP takes calls at 1-302-654-5556, extension 138 or 1-800-366-0632, extension 138. A selection of these questions and Pennartz's responses are published in this column. Anonymity is assured.Q. I am interested in getting information on a "Stretch IRA." How does this work?

A. A Stretch IRA is not a special type of IRA, but rather a strategy to make your IRA multigenerational. A stretch strategy can extend the tax deferred savings on inherited IRA accounts for the next 2 generations.

Here's how it works. In your IRA, there will come a time when you have to take distributions, (required minimum distributions, starting after age 70 and a half). These are based on your life expectancy. If you only take the minimum required, then, eventually, your beneficiary will inherit the remainder of the account. If your beneficiary is in the next generation, e.g. your child, then your beneficiary can take required minimum distributions based on his (or her) life expectancy. In this way, your beneficiary can "stretch" the distributions and the tax deferred compounding over his life time. Anything left can go to his beneficiary.

The "stretching" can continue the tax deferral on the IRA for years and years as long as there is money in the IRA. This money can become a lasting legacy for children and grandchildren.

As always, you should discuss the details of setting up a Stretch IRA with your financial planner.

o Robert S. Pennartz is a Certified Financial Planner Practitioner at the Financial House, a Registered Investment Advisor, in Centreville,

Del. He has been named a top advisor by Reuters, the Global Information Co. (based on analysis of factors including growth of assets under management and growth of average assets per client relative to his peers). He lives in Pocopson Township with his wife and children. He is a registered representative offering securities through Lincoln Financial Securities Corporation, Member SIPC. Lincoln Financial Securities Corporation and its representatives do not offer tax or legal advice. You should consult your individual tax or legal professional regarding your individual circumstances.

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