Personal finance tips: New rules for inherited Roths, and more

New rules for inherited Roths?

Be wary of bequeathing your Roth IRA to loved ones, said Andrea Coombes at The Wall Street Journal. People like using tax-advantaged Roths for bequests because there is no minimum age for distributions, so "money can sit untouched and grow tax free throughout the owner's lifetime." That estate-planning perk, however, might soon disappear. A proposed rule before Congress "would require Roth owners to start taking distributions at age 70 and a half," which would diminish assets available for heirs. Another proposed change would require beneficiaries to receive funds from an inherited IRA within five years, rather than stretching out those payments over their own lifetime. Neither reform is guaranteed, but consider the impact of the changes before you make plans.

Don't avoid credit cards altogether

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Young people are ditching credit, said Ann Carrns at The New York Times. A new survey found that more than 60 percent of millennials (people ages 18 to 29) don't have a single major credit card. The shift could be the result of new regulations making it tougher for those under 21 to get credit or reluctance on the part of already-indebted young people to take on more debt. The survey also showed that millennials were more likely than other age groups "to miss payments or pay late," so steering clear of credit might be a prudent choice in some cases. But there is "a downside to avoiding credit cards entirely," since a thin credit history can make it hard to get a mortgage or car loan. A good middle ground is opening a single credit card account and using it for small, affordable purchases.

Seniors squeezed by student debt

It's not just recent grads who are getting hammered with student debt, said Jonnelle Marte at The Washington Post. The share of elderly Americans with student loan debt jumped to 4 percent in 2010, up from 1 percent in 2004. For most of those seniors, the debt is the result of loans they took out for their own education, including graduate school or continuing education courses. But 20 percent of seniors' student debt comes from loans they took out for their children or other dependents. Seniors are also "more likely to hold defaulted loans than younger borrowers, making them more vulnerable to aggressive collection efforts," including garnishments of their Social Security benefits — the primary source of income for about three fourths of single seniors.