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Greetings, Billybeau, and welcome. You wrote:

<<My parents each have a traditional IRA (60-70K in each account) invested in Mutual Funds. They are at the age where they have to withdraw so much each year. This amount that is withdrawn is deposited into a brokerage account which is also in Mutual Funds. I would like to put some of this money into the RP4. They can live comfortably on their retirement so they may not even have to use the IRA's or the savings account. Should I transfer the money from the IRA's to start the RP4 or use some of the savings account? I also opened a Vanguard Index 500 fund last year with 10K which they deposit $500 a month. Should they continue with this or deposit that $500 into the "sweeping account" until ready to invest with the RP4? Also should they deposit the amount withdrawn from the traditional IRA's into the "sweeping account" for the RP4 investment? Thanks so much!>>

If they don't really need the income, then I would take the money from the IRA. Yes, it gets taxed, but it must come out anyway, and the ultimate taxes to the heirs could well be far less. Assets outside the IRA will be inherited at market value, and that market value becomes the basis for heirs in determining any gain subject to taxes on their ultimate sale. The IRA will be taxable to the heirs at ordinary rates on receipt. Given a choice, I would rather my heirs escape that taxation.

Regards..Pixy
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