Episode 122: "From Forever Taxed to Never Taxed": My Interview with Ed Slott (Part 2)

Some people have a concern about the implications of the tax arbitrage they could be receiving if they just waited. This is the key to the Roth plans and Life Insurance vehicles that Ed described. The big myth is that you will be in a lower tax bracket when you retire. If you let your IRA just continue to grow, at age 72 the plan will be out of your control, and you will be forced to take the money out at the prevailing rates, whatever they are at the time, for the rest of your life. For married couples, there is another problem they don’t think about, and that’s that one spouse usually dies first. This means the surviving spouse becomes a single taxpayer again. This means they will have the same assets and income but at much higher rates. If you don’t pay the taxes now, there will always be uncertainty. If you lock them in now, you will never have to worry about taxes again. Most retirees don’t suddenly begin spending like rock stars. If your single child inherits a million dollar IRA...