Clicking on banner ads enables JWR to constantly improve
Jewish World Review Feb. 16, 2000 / 10 Adar I, 5760

Bruce Williams

Bruce Williams
JWR's Pundits
World Editorial
Cartoon Showcase

Mallard Fillmore

Michael Barone
Mona Charen
Linda Chavez
David Corn
Ann Coulter
Greg Crosby
Larry Elder
Don Feder
Suzanne Fields
Paul Greenberg
Bob Greene
Betsy Hart
Nat Hentoff
David Horowitz
Arianna Huffington
Marianne Jennings
Michael Kelly
Mort Kondracke
Ch. Krauthammer
Lawrence Kudlow
Dr. Laura
John Leo
David Limbaugh
Michelle Malkin
Jackie Mason
Chris Matthews
Michael Medved
MUGGER
Kathleen Parker
Debbie Schlussel
Sam Schulman
Roger Simon
Tony Snow
Thomas Sowell
Cal Thomas
Jonathan S. Tobin
Ben Wattenberg
George Will
Bruce Williams
Walter Williams
Mort Zuckerman

Consumer Reports
Newswatch
Weekly Standard

Econophone

Trakdata


Just how important is a 401(k)?


http://www.jewishworldreview.com -- DEAR BRUCE: The company I have been working for was bought out four years ago. The new company never offered a 401(k) -- instead they offered a discounted stock-buying plan. Right now I own 824 shares of the stock that I purchased at $17 to $45 per share. The stock has not done too well in the past few years, and its shares are currently listed at $19.

I do not see how I benefit from this as I would a 401(k) because it's after taxes. What are the ins and outs of selling if I choose to? -- R.B., Paris, Ky.

DEAR R.B.: Had the stock gone to $119 you would be in "tall cotton," and you'd know exactly why it was good for you. The problem is that when you invest, you should understand that prices can go down just as they can go up.

Even at a 15 percent discount, this stock was no bargain. If you choose to sell (I assume that there is no holding period), you can contact any broker and they can convert it to cash. You might want to consider putting the money into a Roth IRA. Its extraordinary tax benefit can not be overemphasized.

DEAR BRUCE: I am a blind WWII veteran who urgently seeks your advice. In November of 1975 my brother informed me that I was the beneficiary of a life-insurance policy that was in a safety-deposit box. After his death, his widow informed me through an attorney that there was no policy there. How can I find out the name of the insurance company who sold him the policy 25 years ago? Thank you. -- F.M., Las Vegas

DEAR F.M.: Unfortunately there is no central depository that I know of. If you know the state where your brother died, you might check with the escheat division of that state. See if any insurance company turned in funds for which they could find no beneficiaries.

As far as any method of tracking down the company of a policy issued over 25 years ago, the chances there are almost nonexistent. Then, too, your brother may have cashed in the policy or let it lapse.

DEAR BRUCE: We are planning on purchasing a new automobile for $30,000, and my wife thinks we should pay cash. We are both 70 years old, we have no credit-card debt or mortgages. I think that we should lease the car and take the $30,000 and invest in a mutual fund or some other instrument. What is your opinion? -- C.K. (e-mail)

DEAR C.K.: It depends on the interest rate you are being charged with a purchase or a lease. Generally speaking, I think you should consider an outright purchase. But can you invest the money elsewhere at a higher return? This is very possible given the fact that the financing companies offer very competitive low rates -- their primary function is to encourage car sales rather than show a profit, although many manage to do both very well.

On balance, if you were comfortable with a moderate degree of risk, financing a car and investing the money in the market place should prove to be the best choice.



Send your questions to JWR contributor Bruce Williams by clicking here. (Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.) Interested in buying or selling a house? Let Bruce Williams' "House Smart" be your guide. (Sales of the book help fund JWR).

Up

02/14/00: Shaky partnership buying house
02/11/00: Protection by residential zoning
02/09/00: Benefiting from a reverse mortgage
02/07/00: Ensure your insurability
02/04/00: Absurd community zoning laws
02/02/00: Money or securities?
02/01/00: Can we KO a custodian?
01/31/00: Why sell a home you love?
01/26/00: Everyone needs a will
01/25/00: Will splitting stocks affect rollover?
01/24/00: Should early retirees contribute to SEP?
01/21/00: Strategies for paying off debt
01/20/00: Is 15-percent growth achievable?
01/19/00: Selling a second home
01/18/00: Running from a time-share
01/14/00: Don't be a spendthrift!
01/13/00: Who gets the house?
01/11/00: It all depends on size of estate
01/06/00: Check references before hiring an advisor
01/04/00: Savings bonds a bad investment
12/31/99: Out of state ain't that great
12/29/99: Warranty rip-offs
12/27/99: Checking up on investment handlers
12/23/99: Options good only when company's strong
12/20/99: Capital gains tax sometimes best
12/17/99: Don't give up your nest egg
12/15/99: Small-claims court no panacea
12/13/99: Termite company not liable for termites?
12/10/99: Services provided must be paid for
12/06/99: How do we minimize house-sale gain?
12/06/99: Maximize your tax shelter!
12/02/99: My neighbor won't maintain even a modicum of civility
12/01/99: Long-distance rentals a bad idea
11/29/99: Mortgage strategy A-OK
11/18/99: Students can work and learn
11/16/99: Value is what will sell
11/11/99: Y2K: No big deal for real estate
11/08/99: Real life is tough luck
11/03/99: The right time to cash a savings bond
11/01/99: Slow road for savings accounts
10/29/99: What do you want from insurance?
10/27/99: You have a right to see your tax forms!
10/25/99: Why own a house at 65?
10/22/99: Online fine, but CDs?
10/20/99: Love, honor -- and separate credit
10/18/99: Find the value of your stocks
10/15/99: Property lien prevents trade
10/13/99: Clear up debt, only then tie the knot
10/11/99: If it ain't broke...
10/04/99: Should I stick with the company IRA?
10/04/99: Get a financial education!
10/01/99: Insurance: Not much one person can do
09/30/99: Lost tickets are lost cash
09/29/99: Trusting only one financial planner
09/27/99: Adult children should help out
09/24/99: Tips for first-time home buyers
09/21/99: Use the rule of 72s!
09/17/99: Legal strategy can be a pain
09/15/99: Teen drivers drive up insurance
09/13/99: Always use an attorney!
09/10/99: Whose taxes are they, anyway?
09/08/99: How do I roll over my 401(k)?
09/03/99: How can I work out my IRS payments?
09/01/99: When your company can't pay you
08/30/99: Beware of shady viatical investments
08/26/99: Landlords vary on security deposits
08/25/99: Educational IRAs must be spent on education
08/23/99: Finding out the value of old stocks
08/20/99: How to get an FHA refund
08/19/99: 100 percent financing is a scam
08/16/99: Will I have to pay a capital gains tax?
08/16/99: Thinking about PMI
08/13/99: Short-term mutual funds a-OK
08/11/99: It's your job to shop around
08/10/99: Sometimes, roots need to be uprooted
08/09/99: 'Pre-approved' doesn't mean a thing
08/06/99: Only you can determine your investments
08/04/99: Bank IRA the lowest-risk option
08/03/99: Reverse mortgages good for the elderly
08/02/99: Get the survey BEFORE you buy the house!
07/28/99: Get a lawyer -- it's worth it!
07/27/99: If it ain't broke...

©1999, NEA