Stay Alert to ID Theft


Stay Alert to ID Theft

Unfamiliar card transactions of $10 or less may signal that a thief is testing your account number.

I recently received an e-mail that said it was from my bank, but when I clicked on the link in the e-mail, I ended up at a phony Web site. What should I be doing to protect myself against scams? -- M.S., Madison, Wis.

SEE ALSO: Tricks ID Thieves Use

Your best protection is to be alert. Identity thieves have taken phishing -- fake e-mails that link to fraudulent Web sites and ask you for personal data -- to the next level. The e-mails look even more as if they were sent by real companies, with just tiny differences, such as using zeros to replace o’s in the link that includes the domain name. In one scheme, ID thieves send an e-mail that offers a gift card for completing an online survey about your recent visit to a store, says Kirk Herath, chief privacy officer for Nationwide Insurance. It’s easy to fall for the gambit if you have visited the store recently, which is why thieves pick big chains.

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When traveling, avoid using public Wi-Fi for financial business, and beware of networks bearing names almost identical to a hotel’s; scammers use such networks to glean your information, says Herath. Use 3G or 4G cellular networks, rather than Wi-Fi, if you have a tablet or smart phone and can’t access a private network -- say, a legitimate hotel network that requires a password. Set a password for your smart phone in case your phone is stolen.


And be sure to check your credit card and bank statements frequently for unfamiliar transactions of $10 or less. They may signal that a thief is testing your account number.

Roth IRA withdrawals

I read your column about borrowing from a 401(k) for a down payment on a house. I can’t take 401(k) loans, but I do have a Roth IRA. What are the rules for withdrawing money that was rolled over from a traditional IRA to a Roth? -- C.T., Cooperstown, N.Y.

The tax and penalty are based on order-of-withdrawal rules. When you withdraw money from a Roth IRA, your contributions are counted first, then the conversions, and finally the earnings. You can take contributions tax-free and penalty-free at any time.

You can take the converted amounts tax-free and penalty-free if five calendar years have passed since you made the conversion. Each conversion has its own five-year holding period, and the oldest conversions count first. So any money you converted before 2007 can be withdrawn tax-free and penalty-free in 2012 or later. If you made the conversion less than five years ago, you can withdraw that money without owing taxes, but you’ll have to pay a 10% early-withdrawal penalty.


After you take all of your contributions and conversions, the rest of the money is deemed earnings. Earnings are normally subject to taxes and a 10% early-withdrawal penalty if you’re younger than 59½ when you take the money. The rules are slightly different for first-time home buyers; see IRS Publication 590.

Wills on public record

I’ve always been told that when a will goes through probate, everything is in the public record. But I read that Joe Paterno’s will was sealed from public view. Have the rules changed? How can I keep my will private? -- K.M., Washington, D.C.

Paterno’s case was a rare exception. Most states (including Pennsylvania) generally require that a will be filed with the local probate court as soon as a person dies. The will then becomes public record. The judge presiding over probate court in Paterno’s case sealed not only the will from public view but also the order itself. (The family later released the will to the public.)

Most people’s assets, including IRAs, life insurance, and bank and brokerage accounts, pass to heirs privately, outside of probate, through beneficiary designations. People who want privacy often pass assets through a living trust, which doesn’t go through probate and usually doesn’t become public unless there is litigation among heirs.

This article first appeared in Kiplinger's Personal Finance magazine. For more help with your personal finances and investments, please subscribe to the magazine. It might be the best investment you ever make.