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Subject:  Re: Looking for an attractive model Date:  3/15/1999  11:51 PM
Author:  Wavelength Number:  9168 of 88825

Oloss wrote:
<< ...Plus, when you die your heirs will inherit your stocks at the price they are when you die (or 6 months later) and they will not owe the income taxes on 100% of a Roth IRA.>>

RBrowndog wrote:
< Forget that! Talk about bad advise! Enjoy your money! Take a few vacations in Tahiti. The "#*@!" heirs will just blow your money on cars, high definition TV, and club idiot vacations! Let the heirs pay the taxes! :) >

It's bad advice for more than the reason you propose. As stated a few posts above, one of the GREAT things about a Roth IRA when it comes to inheritance planning is that your heirs will NOT have to pay income taxes on it. Although this is true of a traditional IRA (since it is generally made up of mostly before tax money), a Roth IRA is after tax money, and thus no income taxes are owed.
An easy way to view this is that when it comes to an inherited IRA, your heirs are only obligated to pay income taxes on what you would have been taxed on had you lived to draw down the entire IRA account. With the Roth IRA, since you owe no income taxes at withdrawal, neither do your heirs at your death. (Of course inheritance taxes on large estates are a separate issue).
If this is typical of the reasons why the original poster feels that the Roth IRA is "way overblown", then perhaps he feels that way only because he doesn't really know as much about the Roth as he thinks.


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