I match my kids' wage earnings 1:1 (gross income) with a Roth contribution.
The now-college frosh will ring the bell in 2019, hitting the statutory max, and the HS freshman will get ~$1,500. In the past, I funded this from taxable accounts, and could do the same for this year. I attained the all-important age of 59.5 last month, opening up additional options.
My Roth balance is a relatively small portion of total assets at ~ 10%. While I have several years to do conversions, it doesn't look like I could get the Roth balance above 25% of the total accounts without blowing through reasonable marginal tax thresholds. It's also likely the Roth will be the last account I draw from in my twilight years, so this account appears to be destined for my heirs.
Sooooo, I'm thinking the contributions for the kids's accounts could be a withdrawal from my Roth instead of pulling from my "taxable" or regular IRA. Gets the money where I intended, and they don't have to deal with any RMD issues from inheriting my account down the road.
Will be reviewing this approach with my tax accountant in a few weeks. While this makes sense to me, I have to be missing something - what am I missing/ignoring? What should I be asking the accountant about?
I appreciate all comments and perspectives, please share
The now-college frosh will ring the bell in 2019, hitting the statutory max, and the HS freshman will get ~$1,500. In the past, I funded this from taxable accounts, and could do the same for this year. I attained the all-important age of 59.5 last month, opening up additional options.
My Roth balance is a relatively small portion of total assets at ~ 10%. While I have several years to do conversions, it doesn't look like I could get the Roth balance above 25% of the total accounts without blowing through reasonable marginal tax thresholds. It's also likely the Roth will be the last account I draw from in my twilight years, so this account appears to be destined for my heirs.
Sooooo, I'm thinking the contributions for the kids's accounts could be a withdrawal from my Roth instead of pulling from my "taxable" or regular IRA. Gets the money where I intended, and they don't have to deal with any RMD issues from inheriting my account down the road.
Will be reviewing this approach with my tax accountant in a few weeks. While this makes sense to me, I have to be missing something - what am I missing/ignoring? What should I be asking the accountant about?
I appreciate all comments and perspectives, please share