Education & Insights

What You Need to Know: The Secure Act and Inherited IRAs

Traditional IRAs allow individuals to make annual contributions on a pre-tax or after-tax basis, subject to certain limitations. The balances grow on a tax-free basis and are generally taxable when distributions are required to begin at the age of 72 based upon life expectancy factors issued by the IRS. Roth IRAs allow individuals to make contributions on an after-tax basis, and if certain rules are met, future distributions will be free of tax. In addition, Roth IRAs do not require the IRA owner to take minimum distributions during their lifetime, although minimum distributions are required for beneficiaries inheriting Roth IRAs.