46 KIPLINGER’S PERSONAL FINANCE^MONEYPOONWAT
CHARA-AMPHAIW
ANASK KIM Kimberly LankfordWhen It Pays to Buy Travel Insurance
I’M GOING ON VACATION TO THE CARIBBEAN
this summer. Is it a good idea to buy travel
insurance? What should I look for in a policy?
P.L., BOSTONTravel insurance can be valuable if
you would lose a lot of money in non-
refundable deposits if you had to can-
cel your trip. More important, it can
pay for medical evacuation—which is
expensive and usually isn’t covered by
health insurance—if you are sick or
injured while traveling and need to
be transported.
Travel policies often cost 4% to
10% of your total trip cost, says Steven
Benna, of Squaremouth.com, where
you can compare policies. Most poli-
cies will reimburse you for nonrefund-
able deposits if you must cancel or
interrupt your trip because of weather
or because you or a family member
becomes ill. (Most policies won’t
cover preexisting health conditions
that were diagnosed or had changed
typically within 60 to 180 days before
you bought the insurance.)
You will be traveling to the Carib-
bean during hurricane season, so
review the storm coverage. Many
policies pay if f lights are grounded
for 24 hours or if the hotel is uninhab-
itable. If you want to play it safer, you
can find insurers that will reimburse
you if a hurricane warning is issued
within 24 or 48 hours of your trip, says
Julie Loffredi, of InsureMyTrip.com,
which allows you to compare policies.
Squaremouth recommends buying
$100,000 in medical evacuation cov-
erage for international trips, or
$250,000 if you’re going on a
cruise or to a remote spot.More time to repay 401(k)
loans. I understand that the
new tax law changed the dead-line for repaying a 401(k) loan if you leave your
job. How much time do borrowers now have?
S.C., OMAHAThe new—and extended—deadline
to repay the loan and avoid taxes and
penalties is the due date of your tax
return for the year you leave your job.
Before, you had to repay the loan
within 60 days of leaving your job to
avoid taxes on the money, plus a 10%
penalty if you left before age 55. If you
file an extension for your tax return,
you’ll have until October 15 of the year
after you leave your job to repay the
loan without penalties or taxes.Tax documents to keep. Do I need to save dif-
ferent tax records because of the new tax law?
S.K., CHICAGOIf you’re among
those taxpayers
who no longer
file an itemized
federal return
now that the
standard de-
duction has
doubled, you
might not
need to
hold on to
as many
docu-
ments.
Youshould keep records supporting your
income, deductions and credits for at
least three years after the tax-filing
deadline, which is the period the IRS
generally has to initiate an audit. Also
keep records that support any state
income tax deductions.
Other documents to keep whether
or not you itemize: If you’re older than
70½ and make a qualified charitable
distribution directly from your IRA to
charity, keep the charity’s acknowl-
edgment of your gift for as long as you
own the IRA. If you use money from a
health savings account to pay medical
bills, keep the receipts for three years
after you withdraw the HSA money—
whether that occurs right after you
incur the bills or years later.Custodial accounts and coming of age.
My son is turning 18 this year. Do I need to
contact my brokerage firm to transfer owner-
ship of his custodial accounts to him?
M.L., VILLANOVA, PA.The rules vary by state and account.
There are two key ages: the age of ma-
jority (often 18) and the age of termi-
nation on the account (usually
21), says John Woerth, of Van-
guard. When children reach
the age of majority, the
account can be transferred
into their name only with
custodian consent. Other-
wise, they can remove the
custodian from the account
at the age of termination.
Ask your brokerage
firm what ages apply
to your son’s accounts
and the steps you need
to take at each point. ■
HAVE A QUESTION? ASK KIM AT
[email protected]. KIMBERLY
LANKFORD ANSWERS MORE QUESTIONS
EACH WEEK AT KIPLINGER.COM/ASKKIM.46 KIPLINGER’S PERSONAL FINANCE^