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.

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.

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: halversong@csps.com

(c) Copyright 1999. The Christian Science Publishing Society