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Filtering tobacco from a retirement account

Q. The 401(k) options that we have at work all include companies that deal in tobacco. What can we do that doesn't promote those companies but is tax-sheltered? - L.Y., Murphys, Calif.

A. "It's important that people like yourself, who care about public issues, are [also] financially secure," says Gary Schatsky, an attorney and financial planner in New York.

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His recommendation: Stay in the 401(k) plan, since that is helping to ensure your future. But also make a special financial contribution to the charity of your choice based on what you believe you earned from the tobacco holdings. Finally, urge your company to offer a non-tobacco option.

Q. A deceased cousin left me $25,000. I am 60 years old, a freelance artist, married, with a retired spouse. I'd like a conservative investment, with some growth. Any ideas? - C.R., via e-mail

A. "If you don't need to touch the money for five years, invest in a balanced mutual fund, such as Oppenheimer Quest Balanced Value Fund," (800-255-7048) says David Bendix, who heads up Bendix Financial Group in Uniondale N.Y.

The top-rated fund contains a mix of stocks and bonds, but carries a hefty 5.75 percent load charge. You could also buy a variable annuity, but taxes and fees are typically higher.

Q. Everywhere I look, from credit cards to car dealers, I see the interest charged expressed as APR (annual percentage rate.) One credit card offer I received touts a 3.9 APR. How can I make sure it's legitimate?

- W.H., Pleasant Hills, Pa.

A "A 3.9 percent interest rate is a pretty good rate," says Steven Brobeck, executive director of the Consumer Federation of America, in Washington.

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With such offers, it pays to check into the reputation of the lender and the fine print, Mr. Brobeck says. For example, check if the 3.9 percent rate turns into a higher rate - say 17 percent - after a set time period. Also find out if the APR covers all financing fees.

On big-ticket items, such as mortgages, it's wise to pay an accountant to make sure the APR is properly computed - and not at the consumer's expense, he says.

Questions about finances? Write: Guy Halverson The Christian Science Monitor 500 Fifth Ave., Suite 1845 New York, NY 10110 E-mail:

(c) Copyright 1999. The Christian Science Publishing Society

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