DEAR BRUCE: I am 44. I put the maximum into my 401(k) so I get the full employer match and tax-deferment benefits. I have been very discouraged watching this go down the drain for the past year. While several fund choices are offered, the only one with positive returns is a money-market fund. I am tempted to put my money into that for a while, although everything I read says to ride things out. I have a larger IRA account from rolled-over 401(k)s that are well-diversified, but also not doing well anymore. Should I put my new retirement contributions in a "safer" fund? I can move the money around anytime I want. -- P.Y., via e-mail

DEAR P.Y.: You are asking what amounts to a philosophical question. Should you stay in the market and "ride it out" or sit it out in cash. Only you can answer that question. Twenty-twenty hindsight is a wonderful thing, but the time to have gotten out of the market was a couple of years ago. The big thing that you have going for you is your relatively young age. You have at least 20 years until retirement and during that period of time the market should have recovered nicely. There are a great many people that feel that the place to be is in cash until the market settles down. There may be a lot of merit to that argument. The other side of the argument is if the market does recover you will miss out on that recovery.

DEAR BRUCE: We are retired and in our early 70s with our savings mostly in CDs and mutual funds, which aren't performing real well. We have been contacted by several salespeople who are trying to tell us annuities -- that this is the way to go for the long haul. They claim that the investment is guaranteed and the return is substantially higher than we are getting. What do you think? -- B.T. in Kentucky

DEAR B.T.: If you are a regular reader of my column you will know that I am not, under ordinary circumstances, a fan of annuities. At your ages I would be reluctant to suggest these vehicles. The tax advantages have largely disappeared with the various revisions of the tax law, again, and, at your age, unless you would be content with purchasing a contract that would pay during your lifetime and then disappear, it would seem to me that you could achieve a decent return in many other areas.

DEAR BRUCE: My parents want to get a living trust. They are paying $2,000 to set it up and they are worth around $100,000. Is this what they should be doing? -- Reader, via e-mail

DEAR READER.: With a relatively modest estate such as you have described, I can see absolutely no purpose in setting up a living trust. There are no tax benefits. The only major benefit would be that this could pass outside of probate. Admittedly, this makes it a more expeditious process. On balance, for a modest estate with a properly drawn will, the probate process would be relatively painless.