Saturday, March 06, 2010

NYTimes Retirement Issue offers advice on estate planning, Roths, life insurance


The New York Times Retirement Section Thursday (see posting March 4) also contained two important pieces on financial planning for retirees (link in previous post).

Deborah A. Jacobs offers, on p F2, “For shift to Roth IRA, Know the Pitfalls to Avoid”. There are several tips, such as taking this year’s distribution before converting to a Roth, and be wary of time limits (60 days) on redeposits to avoid taxation, opting out of withholding, and particularly naming beneficiaries (which must be done even if one already has a will, which one should have, of course). Talk to an attorney about this if setting up a trust.

Charles Delafuente has an article on the same page, “When Life Insurance Is More Valuable than Cash.” There is a lot of discussion of viatical settlements and purchases, which are regulated in some states, sometimes only allowed for patients with life expectancies of less than two years. Despite popular wisdom (and a push by some companies to get customers to convert whole life to term), whole-life policies have worked out well for much older people who held them a long time.

And Deborah L. Jacobs has a page-heading article “Estate Planning as a Family Conversation”. The article discusses the issue of coercion and competence, which can lead to contesting a will or trust.

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