RetirementsignThe question of which investment accounts you should tap first in retirement can often be a tricky one. But it gets even trickier if your goal is to leave money to heirs.

How do you balance retirement with your estate planning goals? After all, even if you plan to leave it all to your heirs, you still need to be sure you can take care of yourself to the end. What assets should you spend down first and how should you do so to maximize both end-of-life comfort and the inheritance to leave behind?

The Wall Street Journal pegs the solution in an article titled “The Most Valuable Assets to Leave for Your Heirs.” In the article there’s a strong case for the Roth IRA, and you may have heard the fanfare already. These accounts have been around for a while, but it has only been in the past few years, with the modification of a few laws, that they have become available to just about everyone. In fact, even traditional IRAs can be converted to one.

IRAs are statistically both the most common bequest and the largest in all but the uppermost levels of net worth. They are double-duty assets that can provide for retirement and, if efficiently managed, can provide for loved ones thereafter. Roth IRAs are especially powerful to leave behind for tax reasons, because you pay taxes when you put the assets into the account rather than upon their distribution. The net effect of the distinctive tax treatment of Roth IRAs is tax free distributions during retirement and a bequest to leave behind that is not its own tax burden.

Estate planning is a balancing act. Done right with IRAs, proper planning can be quite the boon for you and your loved ones. What other assets do you possess and how do these figure into the balance?

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Reference: The Wall Street Journal (June 2, 2014) “The Most Valuable Assets to Leave for Your Heirs