Q: My mother has a $50,000 CD that has matured. (Actually it is two $25,000 CD’s. I did it that way so she would not lose all her interest if she had to cash it in.) I am considering putting $25,000 in an I series savings bond and the rest in a 6 month CD. What is you opinion of the savings bonds? Does this seem like a reasonable approach? She is 78. She has about $25,000 in checking and moneymarket accounts. She is going to sell some property soon and probably not need access to the $50,000. She has enough monthly income to live on without dipping into her savings except for major things like a car, etc. She depends on me to take care of this stuff for her.

A: I’m not a financial advisor, but I think if you put it into anything, make sure it’s short-term rather than long term. I think interest rates are going up … at least a bit, so if you wait 6 months or so before locking her in, I think she’ll get more for her money. In the meantime, have you considered a short-term bond fund for some of the cash? It’s a bit more risky, but since she doesn’t need the funds for day to day living, it might be a worthwhile investment should she live another 10 years.

Q: Where can I learn more about Bond funds? After losing about 50 % of my stock/mutual fund portfolio since 2000, I need to redirect my planning and financial goals. What is the best way to calculate how much you will need for retirement. I would like to come up with a figure and work toward that. I am 41 years of age with 14 months to go before I retire from the military

Also, to your knowledge, can an investor begin a 401K on their own?  Active Duty Military do not have that option…how do I get started? My goal is to have the flexibility to manipulate my account to maximize my gains/returns.

A: First, only employees can open a 401(k). Anyone who earns less than $160,000 per year (joint family income, or $95,000 for single income), can open up a Roth IRA in any financial institution for $2,000 ($4,000 if you’re married, $2,000 each for you and your spouse). If you have self-employed income, you can probably open up a Keogh plan which is basically a 401(k) for self-employed people.

As for a bond fund, I think you’re a little young to salt away that much in a bond fund. However, you can find out about bond funds and how they rank at www.morningstar.com. If you lost 50% of your money, you were probably heavily invested in a tech or internet fund. That should only represent 15-25 percent of your investments. The rest should be in an S&P 500 index fund. Vanguard and TIAA-CREF have the best index funds (Vanguard particularly). Go to www.Vanguard.com or www.tiaacref.com and learn more.

PS: The worst time to sell a fund is when everything is down. If you still like the companies the funds hold, keep them and wait until the market bounces back (which it will undoubtedly do).

PPS: Please read my book, 100 Questions You Should Ask About Your Personal Finances. (Available at your local bookstore or online or at your local library.)

Q: What is the likelihood that someone will get the face value of corporate bonds invested in a company that files chapter 11 like Kmart?

A: I think it’s unlikely you’ll get the face value. But, I could be wrong. There’s a lot left to be written about the KMart situation — and, of course, no one knows the future. If the store can right itself — get itself back on track — then your investment might turn out ok. Other than that, I can’t guide you.

Q: My husband and I have a lot of E and EE bonds. We have been purchasing I bonds this past year. We are in our 60’s and do not feel that IRA’s are for us at this age. My question is should we cash in the E & EE bonds and purchase I bonds? We know that the I bonds are earning more but will it cost us a lot in taxes, since we are still working. We are at a lost.

A: You need to assess how much you’ll pay in taxes vs. how much you’ll earn. And, I don’t know why IRAs aren’t for you. They will defer taxes on your compensation until you stop working, and will then hopefully be in a lower tax bracket.

Consult with your accountant or financial advisor on how i-bonds could fit into your portfolio.

Q: I am considering adding I-Bonds to my portfolio as a way to diversify. I currently have a traditional IRA in a large cap mutual fund which is down about 20%. I make regular monthly contributions, but at 50, I don’t plan to use it for about 10 years. I am considering using the additional $1500, as a result of the new tax law, to purchase I-Bonds in a Traditional IRA with my bank. I can’t get the bonds from Schwab. Do you think that would be a sound investment?

A: I-bonds are a good way to diversify. I-bond interest is a composit of a fixed interest rate (right now 3 %) for 30 years plus an inflation rate that changes every six months (1.44 currently). The way the composit rate is set, the current rate for bonds is 5.92%, which is pretty terrific considering where the price of bonds is.

The inflation component is based on the Consumer Price Index for Urban Consumers (CPI-U) and it changes May 1 and October 1 of each year.

The place to go to get information on I-Bonds (more than you’d ever want to know really) is www.publicdebt.treas.gov.