In a (undeterminate date) 2005 WSJ article, Jonathan Clements shares some retirement advice from a Pittsburgh accountant and estate-planning lawyer, James Lange, author of “Retire Secure” and a web site devoted to IRAs and other retirement strategies. “Spend your after-tax dollars first, and then your IRA dollars and then your Roth dollars.”
Children inheriting a regular or Roth IRA have to start taking minimum withdrawals based on their life expectancy. For a regular IRA, they will owe tax on the amount of the withdrawal. Withdrawals from a Roth IRA are income tax free.
Most people will not leave estates large enough to trigger an estate tax (in 2009 the threshold is $3.5M).
Many employer sponsored 401K accounts require beneficiaries other than a spouse to cash out the account. In this case, it may be wiser to convert the 401K to an IRA.