If you qualify, you may want to convert some or all of your tax-deferred money into a Roth IRA, but you’ll have to pay taxes on the amount you convert. Also, if you qualify, you can make after-tax contributions to a Roth IRA.
Unlike a traditional IRA that requires you to start taking money out on April 1 after age 70 1/2, there are no minimum distributions required during your lifetime with a Roth IRA. 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.
Effective in 2020 with the passage of The Secure Act, beneficiaries can no longer “stretch” a Roth IRA to keep the account growing income-tax free with only required minimum distributions (RMDs) based on the beneficiary’s life expectancy. Under the new rule, the beneficiary of a Roth IRA must deplete the account within 10 years; however, all distributions to the beneficiary will be income tax-free. There are a few exceptions to the new rule. For example, the new rule does not apply to spouse beneficiaries or disabled beneficiaries (provided the disabled beneficiary is not more than 10 years younger than the original Roth IRA owner). Minor children named as beneficiaries are also exempt until they reach the age of majority, at which time they will have 10 years to fully withdraw the account. The beneficiaries exempt from the new rule will still have the option to stretch an inherited Roth IRA.