To Liz, please:He’s in his mid-twenties, my son. We co-signed his credit card, which has a limit that he probably wouldn’t be able to afford on his own.
As he begins to take more charge of his finances, he would like to have us removed as co-signers.
Would it make more sense to gradually discontinue using the old card after applying for a new one using just his salary information? Or is it preferable to ask to have the old card cancelled and accept the current blow to his credit score?
Response: It’s unclear if you’ll be able to end this arrangement without shutting the card. Co-signers are prohibited by the majority of major credit card providers. It is more common for parents to add their kids as authorized users. The contrary isn’t true, either, as parents can delete their children from the account.
The issuer may be able to cancel your card if it is co-signed. Your son must call to inquire.
In general, however, it would be better for his credit if he left this account open and applied for a card on his own.
More advice
-
Oregon health Q&A: Where do Oregonians find current bird flu information as feds halt updates?
-
Miss Manners: Older co-worker often exclaims good girl! when I ve finished a project. It s infuriating
-
Dear Abby: Pregnant woman mulls choice to have godmother in delivery room, but not her alcoholic mom
Roth conversions and holding periods
To Liz, please:I paid the taxes and switched some assets from an IRA to a Roth IRA eight years ago. I wish to convert the remaining shares gradually over the following four years, but I am now in a position to do so. Will anything in the current Roth now be eligible for withdrawal at any time, or will each conversion then have its own five-year waiting period?
Answer: Before profits from Roth accounts can be taken out tax-free, the IRS mandates five-year waiting periods. According to Mark Luscombe, principal analyst at Wolters Kluwer Tax & Accounting, the five-year rule applies differently to each Roth conversion, so the partial conversions you’re thinking about will each have a five-year holding period.
According to Luscombe, this is not the case with standard Roth accounts, where the five-year rule begins the year the account was opened and isn’t renewed by further contributions.
Liz Weston, a Certified Financial Planner, writes a column for NerdWallet about personal finance.She can be contacted by phone at 3940 Laurel Canyon, No. 238, Studio City, CA 91604, or via the atasklizweston.com contact form.
