Spend $40,000 a Year From the IRA and Leave the $300,000 Brokerage Account Alone, and the Kids Inherit It With Every Gain Erased. Spend the Brokerage First to 'Save the IRA' and They Inherit a Ten-Year Tax Bill Instead
The conventional wisdom about which account retirees should spend first exists to protect the retiree, but federal tax law treats the two accounts completely differently at death, and the order you choose now can quietly determine whether your children inherit a windfall or a decade-long tax obligation.
The conventional wisdom about which account retirees should spend first exists to protect the retiree, but federal tax law treats the two accounts completely differently at death, and the order you choose now can quietly determine whether your children inherit a windfall or a decade-long tax obligation.
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