Inherited IRA

IRA is short for Individual Retirement Account. It allows people to save money for retirement, with the government giving some tax benefits to help out. The point, as you can guess by the name, is to provide money for your individual retirement.

But what if you choke to death on a mouthful of cake at your retirement party?

At that point, the IRA becomes an inherited IRA. Your heirs are the beneficiaries now, but it's not their individual retirement account, so the distribution of the money has to follow specific rules set out by the government.