Jewish World Review Jan. 04, 2000 /25 Teves, 5760
DEAR D.L.: Why in the world would you want to do that? I think it would be a great deal wiser to convert those bonds to money, pay any taxes that are due and then put the money into an IRA in which you would have a great deal of flexibility. You should be able to outperform the interest paid by U.S. Savings Bonds with no difficulty whatsoever. I consider them a very poor investment and I think most of my colleagues would concur with that assessment.
DEAR BRUCE: For years you have strongly recommended umbrella insurance. I called my insurance agent, and they said that I had $1 million in my homeowner's alone, which is more than the average person. If I had a claim, they would fight hard before paying. Do you still recommend the umbrella? If so, we can lower our homeowner's by $350,000, get the umbrella to $1 million and therefore have $1,350,000 altogether. -- C.M., via e-mail
DEAR C.M.: I would go with you as far as getting the umbrella. However, I don't believe that $1,350,000 is enough. For just a few pennies more you can get a $2- or $3-million-dollar umbrella. It is true that you will never be in a circumstance where you would cause that much damage and agony, but the few dollars involved now will certainly give you a great deal of peace of mind later. Plus, there is the other side of the equation: If you are unfortunate and do sustain severe damage, at least you can take some comfort in the fact that the money will be there to do whatever needs to be done to repair the problems. As the new saying goes, "a million ain't what it once was."
DEAR BRUCE: We are in our 60s and have owned our home for 40 years. We would like to stay here for the rest of our lives, but it is becoming more and more apparent that this may not be possible. People are telling us that we should consider getting a reverse mortgage on our house. That way we can stay here until we pass away and the kids get the house to sell. Could you tell me what this is all about? -- L.N., Blue Ash, Ohio
DEAR L.N.: A reverse mortgage is simply a way that you can receive monthly payments against the value of your home. It allows you to use the equity in your home to live, which makes a great deal of sense to me. It is a very good tool for people who are along in years. The reason your age is a variable is that a lending company agrees to allow you to stay there for your entire life even though you exhaust the "borrowability" of the property. There are now H.U.D. reverse mortgages available. Talk to your local bank, and if it cannot perform this service, I am sure someone there can steer you in the right direction. If there is money left over for your kids, fine. If there isn't, I am sure that they won't begrudge you your own
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