Anyone with experience? Strategies for minimizing tax burden?

Taxed as earned income (unless Roth) Generally spread out the tax burden over a number of years (10)

We have one. We will be cashing the full balance out at the last possible minute because we don't need the money from it (currently).

Discussed this with elderly parent's financial advisor recently. Considering parent making bigger withdrawals now while in lower tax bracket. Instead of leaving the Ira to kids someday who would be in a higher tax bracket.

My pops passed last summer and left me and sis this. I'm thinking best thing is to wait for the next deployment then zero it out while deployed.

My kids will get big ones one day BC I worked for 1 company for a long time, they had a great 401K but not a Roth and you couldn't pull any out until you had been there 25+ years and be over 60 so no chance to convert any to a Roth. I just told them they have 10 years to pay the tax, not spend the money, just pay the tax. And I have an FA that will try very hard not to let them do something dumb. That's all you can do.

Mas89 said:

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Discussed this with elderly parent's financial advisor recently. Considering parent making bigger withdrawals now while in lower tax bracket. Instead of leaving the Ira to kids someday who would be in a higher tax bracket.

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Convert into Roth $

SquareOne07 said:

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Mas89 said:

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Discussed this with elderly parent's financial advisor recently. Considering parent making bigger withdrawals now while in lower tax bracket. Instead of leaving the Ira to kids someday who would be in a higher tax bracket.

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Convert into Roth $

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That's basically the same as cashing the entire thing in, paying the tax and putting the remainder in a cash brokerage account. If the parents die soon, like elderly parents seem to do for some reason, the kids get the same amount. Ask yourself whether you'd rather inherit a $2mm IRA or a $1.2mm Roth.

OldArmyCT said:

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SquareOne07 said:

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Mas89 said:

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Discussed this with elderly parent's financial advisor recently. Considering parent making bigger withdrawals now while in lower tax bracket. Instead of leaving the Ira to kids someday who would be in a higher tax bracket.

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Convert into Roth $

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That's basically the same as cashing the entire thing in, paying the tax and putting the remainder in a cash brokerage account. If the parents die soon, like elderly parents seem to do for some reason, the kids get the same amount. Ask yourself whether you'd rather inherit a $2mm IRA or a $1.2mm Roth.

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It's not the same as cashing it in because it's still flowing into another retirement account that receives tax advantaged treatment.

The preferred inheritance has a lot to do with your assumed tax rate (and how the mandatory withdrawals will affect that tax rate).

Cashing in the IRA and moving it into a taxable account and then just leaving it be is a very wasteful decision.

SquareOne07 said:

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OldArmyCT said:

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SquareOne07 said:

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Mas89 said:

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Discussed this with elderly parent's financial advisor recently. Considering parent making bigger withdrawals now while in lower tax bracket. Instead of leaving the Ira to kids someday who would be in a higher tax bracket.

---

Convert into Roth $

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That's basically the same as cashing the entire thing in, paying the tax and putting the remainder in a cash brokerage account. If the parents die soon, like elderly parents seem to do for some reason, the kids get the same amount. Ask yourself whether you'd rather inherit a $2mm IRA or a $1.2mm Roth.

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It's not the same as cashing it in because it's still flowing into another retirement account that receives tax advantaged treatment.

The preferred inheritance has a lot to do with your assumed tax rate (and how the mandatory withdrawals will affect that tax rate).

Cashing in the IRA and moving it into a taxable account and then just leaving it be is a very wasteful decision.

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Agreed. I would rather inherit a $1.2mm Roth and a $1.2mm taxable account.