DEAR BRUCE: My mom is 86 and has been reading many articles about Roth IRAs. Should she transfer her money into a Roth? Is she eligible to open a Roth account, or is this strictly for people that still are active in the work force? — I.T., via e-mail

DEAR BRUCE: My mom is 86 and has been reading many articles about Roth IRAs. Should she transfer her money into a Roth? Is she eligible to open a Roth account, or is this strictly for people that still are active in the work force? — I.T., via e-mail

DEAR I.T.: Roth accounts are meant for people that still are in the work force. However, your mother still is eligible to transfer funds into the account as long as it is money earned after taxes. (In other words, money that she receives from Social Security, as an example, cannot be transferred into a Roth account.) If she has money in a rollover IRA or some other retirement account that she earned many years ago, this money can be transferred into a Roth IRA account. The taxes must be paid before the transfer is made. At your mother's time of life, the chances are she would be just as well to pass this one by.

DEAR BRUCE: My mother is 75, and is going to sell her home and move into a slightly cheaper condo in a 55-plus community. She will end up with about $75,000 in cash from the sale of her home. What is the best way to lessen the tax implications on this money? How should it be invested? She currently has low-risk investments with a commercial brokerage. Should we just add this to that money or diversify our investments with another broker? — M.E., via e-mail

DEAR M.E.: I don't know of any tax implication that you have to lessen. Your mother can legally have a profit of $250,000 on the sale of her home. If she sells the condo two years from now, she can take another $250,000 profit if she is fortunate. Your mom has low-risk investments that you're comfortable with, so I don't see a problem. If you wish to diversify, I don't have a problem with that either, but understand that $75,000 is not an amount that's going to get a great deal of attention from a new broker. It's just not enough. Having said all of that, congratulations on the sale. Your mother can keep that money, and if she's not comfortable anyplace else, she most surely can get about 4 percent in a one-year CD.

DEAR BRUCE: I am 51 with close to 20 years at my present job earning about $81,000 per year. I recently refinanced my house for $125,000 at 6.25 percent with a 13-year biweekly payment schedule. I have no credit card debt. My monthly bills, including mortgage and taxes, come to $2,746. I bring home $2,292 every two weeks, of which I invest $10,000 per year in a 403(b), which my company matches at 50 percent up to a certain amount (which escapes me at present, maybe $1,500 max). I have about $60,000 in that account. I have almost $15,000 in a regular savings account. My husband is 57, doesn't work or earn and has about $48,000 in a tax-annuity account. Is it smarter for me to increase my 403(b) contributions or pay more toward decreasing my mortgage? Or should I be doing something else with the extra money? I am ashamed that at my age I am not in a better financial situation, and want to start on a smarter plan as soon as possible. — D.I., via e-mail

DEAR D.I.: You're on pretty solid ground, although this is a relatively recent situation. You mentioned that you recently refinanced for $125,000, but you didn't say where it went (possibly to pay off bills?). The 13-year biweekly payment at 6.25 percent is not a bad deal. You won't find a better interest rate. You should put your money into the 403(b), indicating you work for a nonprofit, and take advantage of the extra money they send you. In no way would I reduce the mortgage. That's returning you effectively 6 percent but it decreases your ability to maneuver. You haven't mentioned how well the 403(b) is doing. If it's faring well, increase it to the maximum allowable contribution. If it is not performing well, then you should be out there examining other possibilities — mutual funds, securities, etc. I know these are complex decisions, and your husband's situation does not help things a whole lot. Under these circumstances the more you can save, the better off your retirement will be. You have another 15 years, and with prudent living you should do fine.

Send your questions to: Smart Money, P.O. Box 2095, Elfers, FL 34680. E-mail to: bruce@brucewilliams.com. Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.