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When the Stretch Snaps: Computing Damages

When a retirement plan participant dies, the Internal Revenue Code's minimum distribution rules generally require that the plan benefits be distributed in annual installments over the life expectancy of the participant's designated beneficiary.1 Most advisors know that this post-death life expectancy of the beneficiary or so-called payout of retirement benefits can be a valuable tax deferral option
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When a retirement plan participant dies, the Internal Revenue Code's minimum distribution rules generally require that the plan benefits be distributed in annual installments over the life expectancy of the participant's designated beneficiary.1 Most advisors know that this post-death “life expectancy of the beneficiary” or so-called “stretch” payout of retirement benefits can be a valuable tax deferral option for the beneficiary, especially when that beneficiary is young.2<

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