By HELEN HUNTLEY
© St. Petersburg Times, published September 17, 2000
Q. I have my original certificate of deposit for $15,000 and the bank claims I cashed it in. I don't remember doing that. Wouldn't I have had to turn in the certificate to get my money?
A. No. And there's a very good reason for that: It would be unfair if a bank kept your money just because you could not find your certificate.
Standard banking procedure is to require a customer to present identification and sign an indemnification agreement releasing the bank from liability in case the certificate later shows up.
Go to your bank and ask to see the indemnification agreement if you don't think you cashed the CD, advised James Roberts, senior vice president of SunTrust Bank Tampa Bay. The next time you take out a CD, you may not even get a certificate, he said.
"Banks in the mid-'90s started going away from certificates and started treating those accounts the way checking and money market accounts are treated," Roberts said.
Q. I am worried about my retirement. I have a Roth IRA and a 401(k) from my work, plus I have about $10,000 in some top stocks. I have figured if keep doing what I am doing I may have $300,000 when I retire, but I don't think that will be enough.
Would I be better off putting the $10,000 in a mutual fund and adding say $100 to it every month? If so, what kind of fund? Would it be better to go with a fund that emphasizes the yields of the stocks? I am single and have no intention of changing.
A. I have no crystal ball that will tell me whether a mutual fund you might buy would do better than the stocks you own. I believe in mutual funds because picking stocks is so difficult. I like index funds that allow you to ride with the market as a whole instead of trying to make bets in particular sectors.
My suggestion is that you sell at least enough stocks to open an account with the mutual fund of your choice ($1,000 to $3,000 is a typical requirement) and sign up for an automatic investment program in which your bank transfers $100 or an amount of your choice from your checking account to the mutual fund company every month. I wouldn't worry about the yield of the fund; it's the total return that matters.
The more worried you are, the more aggressively you should be saving and paying off debts. In addition to improving your net worth, you will be getting accustomed to living on less money, which reduces the amount of money you will need to live on in retirement.
Q. If I leave money to charity in my will, is that included in the $675,000 when calculating whether estate tax is due? I want to set it up so there is no tax on the remainder. How about probate? In the above example, is the entire estate subject to probate or only the amount above $675,000, excluding the charitable bequest?
A. Probate and estate taxes are two different things, and you aren't the only one to get them confused. If you are using a will to convey any amount of assets to anyone, including a charity, those assets will go through probate. The probate process verifies the validity of the will. Trusts do not go through probate, but even if you have a trust, you may need a will to convey assets not in the trust. If you die with assets but without a will, your estate also goes through probate and passes to your heirs according to state law. Of course, if you want anything to go to charities, you must have a will or trust.
Estate taxes apply to estates of more than $675,000, adding together assets that pass through probate or through a trust or through direct naming of beneficiaries (such as an IRA or a life insurance policy). Amounts left to charity are deducted from the total. If they bring the total to less than $675,000, your estate would not owe estate taxes.
I hope that clears things up for you.
Here's a great new resource: BondResources.com (http://www.bondresources.com), a site devoted to government, agency, municipal and corporate bonds and bond funds. You can get current yields, news, commentary and educational information about bonds.
Presidential hopefuls Al Gore and George W. Bush have their plans. We want to know what you think is the best way to secure Social Security's future? Should a portion of Social Security taxes go to personal retirement accounts that allow workers to choose their own investments? Should benefits be reduced for future retirees? Please send me your thoughts by mail or e-mail.
- Helen Huntley writes about investing and markets for the Times. If you have a question about investments or personal finance, send it to On Money. We'll try to answer those we think are of greatest reader interest. All questions must be submitted in writing, but readers' names will not be published. Send questions to Helen Huntley, Times, P.O. Box 1121, St. Petersburg, FL 33731, or to firstname.lastname@example.org by e-mail.