So I know I have brought this up before, probably a couple of times, but did not get the answer planted in my head. The wife and I filing jointly are in the 12% tax bracket. Our kids, well 2 out of 3 are in the 32% bracket.
We had a CD mature in the wife's IRA this month, we are thinking of pulling it out and paying the taxes on it, actually would like to do the same with all the money in the IRA over time. Why? If, big If, we only are taxed at 12-22%, we are thinking it is lower than what our kids would have to pay if/when they have to drain the IRA, unless they are retired when we pass. On my Dad's IRA I have 10 years to fully drain it...a spouse would not have to...
But I remember when I posted this same question awhile back someone's reply saying the amount taxed from an IRA is different than regular income tax...just can't find the post...we may need to consult an CPA...
What we are realizing, a traditional IRA, has the same investment opportunities as normal monies outside an IRA. If it were liquid, taxes paid, just thinking it would be better for the kids. But may be wrong...