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Two posters now have pointed out that the I in IRA stands for INDIVIDUAL, not inheritance. None the less, I did not invest in IRAs based on the name, but based on what the rules of the accounts were, which included being able to pass the account on to children with RMDs from year one. The gov't now under guise of making it easier to accumulate retirement funds are now going to eliminate a key point that triggered my investing in this type of account. And it's not the first time they change the rules after decisions have been made. When we retired early the ACA was to be our backup for healthcare should our retiree healthcare go away, or for me when DH hits 65 and switches to Medicare, rendering his retiree healthcare null and void. Medicare itself was the terminating factor for most companies that provided retiree healthcare, and the 401K/IRA no doubt contributed to the decline of corporate pensions. The availability of student loans is a big reason for the escalating cost of college. Lots of unintended consequences.

The only reason why the gov't is so willing to change these rules at will is because they do not play by these same rules. It's time they felt the pain of the changes they impose on others. Perhaps this way they would think things out more carefully and anticipate the unintended consequences of their actions. I realize this is not the board for this, and will not follow this line of discussion further, but yet again it bears warning on a tax strategies board that we live in a yo-yo state of gov't where the previous administrations mandates are likely to be reversed by the next, making long term strategy a crap shoot.

Will have to think this through and reconsider our recommendation that the boys contribute as much as they can to their IRAs/401Ks, and instead put the money in a taxable brokerage account in a tax efficient way.

...

I really think that's an overreaction...Especially for young people, a traditional 401(k) or similar company plans, or a traditional IRA, can be a valuable first step for retirement savings. It's a lot easier to get started on a pre-tax basis, to get that first critical mass of retirement capital, and also to earn the company match where applicable.


Really? Thinking something through is an overreaction? That does make you a much more conservative person than I. At 24 Eldest already maxes out his Roth 401K and IRA, in part because of my suggestion. Though he is already at the 24% tax bracket, given the industry he is in this is likely to be the lowest tax bracket of his life, so no TIRA/401K for him at this time. Yes, it's time that I think it through and possibly suggest he just does the 401K to company match, but because unlike us he has Roth 401K and IRAs at his disposal now, I have to think it through and discuss the options with him. Knowing the whole picture is important when giving advice.

So now I'm analyzing and contemplating the pros and cons of taking bigger amounts out of my inherited IRA before (now) age 72, when the RMDs on the "big IRA" will kick in. That probably sounds like it makes sense, but in the short term, I still don't like the idea of generating more taxable income than I need, when I may still be able to use IRA money to pay deductible LTC premiums and other medical expenses in the future. I still think that the double standard deduction may not be with us forever, which would probably have us deducting those items again.

Unless Trump's tax changes are made permanent, which IMO is unlikely in the above referenced Yo-Yo state of gov't, we revert back to 2017 tax law in 2026, so you are likely right about the future of the double standard deduction. We won't be subject to RMDs until after 2026 so the decision to convert to Roths is an easy one for us based on what we know today. And as I mentioned in a previous message on this thread, it becomes all the more important for us to do if this new law passes and the kids will have to draw down their inherited IRA over 5-10 years, since we would much rather they get the money than Uncle $am. Run your numbers, look at the data on hand.

IP
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