Q: I’ve heard good things about whole life insurance. Is it a good investment? — N.S., Winter Park
A: When looking at whole life insurance, or any life insurance product, keep in mind you are purchasing an insurance product first. You must first consider whether you need insurance and then determine the most appropriate way to get the insurance. If you you don’t feel comfortable with the policy someone is trying to sell, have the policy reviewed by an independent adviser who is not compensated from selling the product. — Colby Winslow
Q: In 2006 I rolled over a company sponsored 401(k) plan into a regular IRA. However, about $37,000 of the amount rolled over was from "after tax" contributions. I am not sure why this amount was not put into a Roth IRA at the time and don’t recall this being mentioned as an option. Is it possible move these funds into a Roth today without penalties or issues? — R.G., Clermont
A: Unfortunately, you cannot transfer only the after-tax contributions from your traditional. Instead, you must use a formula when converting to a Roth. Let’s say you have a $100,000 IRA, of which 37 percent is after-tax contributions. If you converted $37,000, only 37 percent of the conversion ($13,690) would be after-tax contributions. 63 percent ($23,310) would be pre-tax contributions/earnings and considered taxable. — Denise Kovach
Have a question? E-mail askanexpert@fpafla.com. Include your name (only your initials will be printed), hometown and phone. Questions are answered by Certified Financial Planners from Financial Planning Association of Central Florida. Answers are for educational purposes only; you should also consult a financial professional. Questions and answers may be edited for space considerations.
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