Roth IRA?

Q: I would like to thank you first of all for making yourself available to answer my financial questions...

I am interested in securing my future as well as my children's future but not quite sure how/what the best way to do it is. I want to begin saving for retirement and start individual saving funds for my children (7 & 4). I considered... the 529 College fund, but thought what if the children decided not to attend college... I spoke with an advisor who suggested that I start a Roth IRA, which would offer me flexibility and even allow me to use it for my children's needs.

I currently have a traditional IRA and am considering rolling over all or part to invest in a Roth. What shall I do?

Additionally, I would like to purchase Long Term Care insurance and/or Universal Life Insurance. I know I am kind of all over the place... please advise what would be best.

A: Unless you have an unlimited income, you should probably prioritize your goals. If you don't have sufficient insurance to take care of your children should you pass away, then that should be your first priority. If you are on a budget then I would recommend term insurance because it will allow you to buy considerably more death benefit than a universal policy. You can even choose one that is convertible to permanent insurance in case you become uninsurable.

Next, you want to make sure that you have an adequate emergency reserve. Most advisors recommend between 3 and 6 months worth of living expense. That money can be kept somewhere safe and liquid such as an online money market account.

If you have any credit card or other non-housing debt that has an interest rate over 6% then you should work on paying that off.

A Roth may make sense as well. I agree with you about a 529 plan.

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