Individual Retirement Account

Also known as IRA. When a spouse inherits it, new beneficiaries must be named, and you can do these 4 things:

1. Keep spouse's IRA
2. Move spouse's IRA assets into your own account
3. Same as last point but convert IRA into Roth IRA
4. Discharge

Now, if:

• Traditional IRA: Contributions may be tax-deductible, and earnings grow tax-deferred.
• Roth IRA: Contributions are made with after-tax dollars, but qualified withdrawals in retirement are tax-free.

Why not put all one's cash into Roth IRA? $7k/year limit [1]. But good thing is, benefits are tax free.