Hi, I am an advisor. I have a client who passed and his only child inherited 330k in an IRA. Father was 66. he and his wife are 35, make about 300k per year with 2 kids . They are savers.

I am sure there is a happy medium to serve the clients. figured I would throw this out and see what fellow forum folks have to add. I have never met or spoken to the new CPA, but I believe he has clients best overall interest in mind.

I recommended he use lifetime stretch at this point and draw enough money to contribute to Traditional IRAs and the convert to Roths. He has an IRA, but I am recommending he either move that money into his 401k or convert as well to a ROth this tax year to take advantage of lower rates this year.

If market has a significant correction, I could see the wisdom in drawing out faster, taking advantage of the lower current rates and reinvest into an efficient investment portfolio that we can control taxation through harvesting.

At issue, clients new CPA is recommending the take the money out over 5 years to take advantage of lower rates.
however he then recommended ( via email to me) that they could max out their 401ks to offset tax consequences if they wish. This seems contradictory as they would be selling to then sell at higher tax rates ( presumed by him) at their retirement age. he said ” this is a better strategy then slowly withdrawing money over a long period of time”

he says he believes in paying the right amount of tax, but also that he believes in having access to capital without restrictions, which is also contradictory to me.

He has pushed off a conversation until after 3/15 due to tax season ( which I GET) . I believe financial planning is a bit of an art form, I just don’t see wisdom in taking something out of something that is tax deferred and 100% liquid at any time to them ( with taxes due of course) to putting money into their 401ks which would create tax later again at unfavorable rates and be essentially illiquid until 59.5. the remainder of the money would then also be taxable any time we make a sale of an investment or switch investment philosophies as they age.

other factors:
clients have about 260k liquid from sale of inherited home and personal savings.
they have approx 100k in retirement accounts currently.
2 children who will be going to college.

Thoughts? thanks in advance for the conversations.