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Your complaint seems to be that you never want to pay any taxes on that money, and I think that was never a likely scenario. You took the tax deduction when you made those contributions to the TIRA knowing that all those dollars would be taxable when they were taken out, and all at ordinary income rates. It was never supposed to be a free ride for those dollars, and you are now realizing that.

My "complaint," if I had one, would be that they changed the rules of the game well after the game started. But I am not "complaining," I am strategizing on how to make things work best for us.

I don't see this as a change at all, and I have to say that I don't see the huge difference between you paying taxes on those dollars now vs. your kids paying taxes on those dollars later when they withdraw them. Either way, taxes have always been due upon withdrawal, and you will have the ability to pay those taxes from that money that is withdrawn.

The change is that the kids might only get 5 years in which to withdraw the money and pay the taxes, rather than be able to save the funds for their own retirement and pull out only the RMD, as was the plan when we took the account out. Again, rules changed, eliminating a perk in the account that we valued, one of the perks we took the IRA out for, and may not have if it had not been there. We can't change our accounts, but are likely to encourage the kids to invest differently.

I am learning a lot from these discussions.

Me too. That is the goal, right? Can't say everything I put on these pages is well thought out, but I know I can count on others here to point it out when it's not.

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