Understanding Who Should Be Beneficiary of Your IRA
How to Turn a Modest Inheritance Into Millions for Your Family
21. What about a Roth IRA?
If you qualify, you may want to convert some or all of your tax-deferred money into a Roth IRA. You'll have to pay income taxes on the amount you convert, but it can be worth it. If you qualify, you can also set up a new Roth IRA and make after-tax contributions to it.
Unlike a traditional IRA that requires you to start taking money out at 70 1/2, with a Roth IRA there are no required minimum distributions during your lifetime. And, generally, after five years or age 59 1/2 (whichever is later), all withdrawals are income tax-free. So you can leave your money there, growing tax-free, for as long as you wish.
You can stretch out a Roth IRA just like a regular IRA. After you die, distributions can be paid over the actual life expectancy of your beneficiary. Your spouse can even do a rollover and name a new beneficiary. And, remember, all distributions to your beneficiaries will be income tax-free.