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Do You Want Fries With That? Dear Mr. Berko: My 16-year-old son has saved up over $6,000 in the past two years from part-time jobs and wants to invest this money. He has done some research on the computer, and his investment of choice is McDonald's. I also looked it up and read …Read more. Avon Lady Dear Mr. Berko: I've been using Avon's soaps, skin care lotions and fragrances almost forever, and my neighbors and I believe that the company's products are just as good or better than those of Revlon, L'Oreal and others. So I bought 200 shares in …Read more. Foreign ETFs Dear Mr. Berko: My new broker recommended Finnish, Norwegian and Swedish exchange-traded funds for me, which I have listed here. What can you tell me about investing in those countries? I know what an ETF is but hope you can explain the terms "…Read more. A Smokin' Stock Dear Mr. Berko: Several places in New York and New Jersey have increased the minimum age to buy tobacco products to 21, which is expected to sharply reduce smoking by our young people. Our 17- and 19-year-old boys smoke, and such a law here would …Read more.
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Paradise Redux

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Dear Mr. Berko: I'm 66, widowed and retired at 62. I own a one-bedroom condominium with a $24,000 mortgage, have $9,000 in savings and had an income of $41,000. I get $19,000 from a pension and Social Security, and $22,000 from a $440,000, 5 percent CD coming due next month. The bank will give me less than 1 percent on renewal, and I'm scared of what's going to happen because I will have to chop holes in my $440,000 security blanket every month to pay bills. Soon there will be little left after 40 years of working and raising two kids — a son who was killed in Iran and a daughter who was taken from me by a drunk driver on April 10, 2006.

I'm nervous, afraid for my future, and bitter and angry because I'm going to lose my precious safety net through no fault of my own. A neighbor suggested I write to you for stock advice, and that you could recommend some safe utility stocks. If I put all of this money in good, safe, profitable utilities paying 5 percent, I could just about make it if I watch my nickels and dimes closely — like selling my car and taking a bus to my bridge games, canceling my cellphone, reducing my cable package, plus a few other things. I could probably save about $3,000 a year. Please advise me. — FP in Erie, Pa.

Dear FP: As the government becomes a more dominant participant in our lives, we become less able to influence the important health, educational and financial decisions that affect us. And in the process, that little piece of paradise ($440,000) for which you saved and certainly slaved over 40 working years is draining into a giant cesspool nurtured by Congress.

Frankly, I don't share the unbridled enthusiasm of my contemporaries, so I'm reluctant to recommend a $440,000 exclusive portfolio of "good, safe profitable utilities." I'm certain as sunrise that interest rates will be much higher five years hence and certain as sunset that inflation will pervert the purchasing power of any dividend income you receive today. So there's no way you can safely replace that $22,000 CD income with a similarly safe and liquid investment. But unless the administration is willing to TARP senior CDs, or give retirement aid to seniors, the holes in your security blanket may leave you uncovered and cold.

So you have the following choices:

1. Consider putting a portion of your money in variable annuities that will guarantee you 5 percent a year for life, and if the value of the account rises above your original investment (which is likely only if you select some exceptional mutual funds, which is unlikely), that 5 percent payout will increase modestly. And while I don't like VAs, there are a few whose promises and financials I trust more than I trust the government.

2. Find a spouse or a live-in companion with similar financial and familial circumstances. Invest your funds accordingly in 5 percent or higher yielding issues and split or share your living costs.

3. Move to Costa Rica, Mexico, Spain or Italy, where you can live comfortably on much less than it costs to live here. And take a companion with you.

4. Join an "elder-commune" in California, Arizona, Hawaii or Washington State where like-minded seniors share governance and infrastructure.

5. Consider a portfolio of utility issues such as American Telephone yielding 5.8 percent, Verizon at 5.4 percent, Pepco Holdings at 5.4 percent, PPL Corporation at 5.0 percent, Exelon at 5.4 percent or Otter Tail Power at 5.5 percent. These telephone and electric utilities have modestly grown their dividends over the past many years and should continue to raise them in the future.

6. Consider a portfolio of the utilities above, and include some high-yielding oil and gas pipeline issues such as Boardwalk Pipeline, Energy Transfer Partners, TC PipeLines, TransMontaigne Partners, all of which are yielding better than 7.5 percent. These issues, too, may increase their dividends modestly each year.

7. Perhaps consider a little bit of each recommendation as it fits your circumstances, temperament and personality.

Whatever you do, be mindful that you are in the same boat as millions of other seniors. So while the recession is over, I doubt the good times are coming back for you. Businesses, municipalities and states are downsizing, services and programs are being cut, wages are trending lower, waiting lines will be longer, pensions and benefits will be smaller, our standard of living is declining, home prices will remain weak, and unemployment will remain high. And the middle class is disappearing.

Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775, or email him at mjberko@yahoo.com. To find out more about Malcolm Berko and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

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