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Jewish World Review Dec. 6, 1999 /27 Kislev, 5760

Bruce Williams

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http://www.jewishworldreview.com -- DEAR BRUCE: I am a single mom with two minor kids; I make $25,000 a year. I have recently gone to a new company, which bought out my former company. I have two 401(k)s, which I have invested with two different companies. I can take my $11,000 out and move it to either a new 401(k) or an IRA. I will also participate in the new company's 401(k), but should I move my other money into the same one, a self-directed IRA or a Roth IRA? -- P.R., via e-mail

DEAR P.R.: All things being equal, I would either roll it over into an IRA or possibly a Roth IRA. This will depend upon your age and how much of the taxes you will be able to afford out-of-pocket so as to maximize the tax shelter. Perhaps there will be no tax, given your income. Assuming that this is not possible, then why not put it into a regular IRA? If you think that the new company has a great investment package, there is nothing to stop you from mirroring it with your own program. This should give you broader diversification, which I believe has value.

DEAR BRUCE: My parents are in their late 70s. My husband and I try to help them as often as we can. Their house is paid for and they have about $50,000, which I have invested for them in a six-month CD. Are there other options? It's not my money, so I feel uncomfortable if there is risk. -- M.R., via e-mail

DEAR M.R.: You are not doing anything risky at all. However, you are sacrificing a substantial return. There is another area which I believe is very safe: high quality, top-rated corporate bonds. Even the U.S. Treasury and long bond is paying about a point over your CD, and the corporate bonds are paying 2 to 3 percent over that with a high degree of safety. Over the long pull, quality equities will survive and prosper.

DEAR BRUCE: I am a freshman in college. I have a roommate who is a very pleasant guy, but he has one big problem: He smokes marijuana. The other kids in the dorm say that it is no big deal, but I am not comfortable with him and I am very uncomfortable when he smokes in our room. I called my folks, and they said that this is part of life and I should tough it out. If you agree with them I will do that, but I can't imagine that you would. -- R.R. Iowa City, Iowa

DEAR R.R.: A college education is one of the wisest investments a person can make, and you have the right to see your tuition well-spent on a comfortable atmosphere in which to study. There is no reason for you to "tough out" an activity that makes you uncomfortable in your room. While I am the last to tell you how to settle moral issues between you and your roommate, at the very least you should tell him that you will not tolerate him smoking marijuana in the room. Failing that, I would go right down to the housing office and ask for a new room assignment.



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

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