Every time you make the argument, I'm pretty sure you aren't understanding the set-up.
I'm not talking about your cash flows, your cigar spending, your vacations (although, that would be an interesting discussion in and of itself, but is NOT part of this), I'm talking money saved over the years. Lets say you have $2MM saved up for your retirement in a 401K. You turn 65 and can pull money out penalty free at this point. Your children are probably around 30.
Your options with your retirement money are either: 1) Keep it in your hands, use it as necessary to pay your retirement expenses. Eventually you die and any remainder is given to your kids after they are taxed by the government. 2) Disburse the maximum tax free amount to your children annually, use what is in your hands to pay your retirement expenses. If you die before disbursing everything to your children, the remainder is taxed by the government. If you have disbursed everything to your children, they are then responsible for supporting the rest of your retirement expenses until you eventually die, at which point all remaining assets are already in their hands and untaxed.
As you can see, I'm not talking about "do I have an expensive cigar, or buy my kid braces" decisions... those are interesting enough, but probably not as clear cut. I'm talking decisions where you are sacrificing nothing (unless you don't trust your kids to help you when you run out of money) but are provided with the opportunity to maximize your kids wealth.
victor809 wrote: