Washington Post columnist Martha M. Hamilton was online Tuesday, April 22 at noon ET to answer questions about financial planning for retirement.

She was joined by Mary Malgoire of The Family Firm.

A transcript follows.

To read past Financial Futures columns, click here.

____________________

Martha M. Hamilton: Hello, and welcome to our chat today. We have Mary Malgoire from The Family Firm, to help us with our questions about financial planning for retirement today. So let's get started!

_______________________

Fairfax, Va.: Today is Equal Pay Day, or how far an average woman must work into 2008 to equal an average man's 2007 salary. What will it take for women to receive equal pay to men? More women are working full-time and some are now the primary breadwinners for their families. In this new double-earner society, shouldn't this pay gap have disappeared long ago? What can we, as women, do to hurry that along and what can we do in the meantime to make sure we have enough saved for retirement?

Martha M. Hamilton: I don't think it would be appropriate to say: Happy Equal Pay Day. I hope I live to see the day when there isn't a meaningful difference in men's and women's pay. Two things help keep that gap as wide as it is: women often go into lower paying professions, and there seems to be a tendency for pay to go down as women begin to dominate profession previously dominated by men. One thing women can do about retirement is to make sure that they continue to contribute to retirement savings if they take time off from the workplace to care for children.

_______________________

Silver Spring Md.: Do you think it's important to keep up retirement contributions during an upcoming 4-month maternity leave that will be mostly unpaid? Given that our taxable income will be much lower this year, would you suggest considering putting the contributions in a Roth rather than my company's 401K? I know we need to check with a financial adviser who could evaluate our situation but any general advice in the meantime?

Mary Malgoire: Can you afford to part with the retirement contributions during the leave? If so, it probably does make sense to make those contributions into a Roth, given your lower income this year. If you need the funds, I wouldn't stress about not funding retirement for 4 months at this point in your life.

Martha M. Hamilton: If you can contribute, I would, but I agree that four months probably won't make a huge difference.

_______________________

Southern Maryland: We have a 401k and a state government pension plus a 457b. We are 5 years (401k) and 10 years (457b & pension) away from retirement. We are both eligible for Social Security. Besides maxing out our contributions and using the 50 yr.old provision what else should we do?

Initially we thought that the 457b would fund travel. Now, it looks to be earmarked for health insurance premiums. The other shoe has dropped with rising energy costs, e.g., electric, gasoline, gas, etc.

Mary Malgoire: Looks like you'll be living on the SS and pension and thinking of other retirement savings for specific needs (health ins). However, we suggest only withdrawing 3-4% per year from the retirement savings so it will last your lifetimes. If you can, now while you are working, save funds to a Roth (combined income must be under $159K) or on an after-tax basis to a no-load, diversified mutual fund.

_______________________

Bethesda, Md.: It seems like there are no "safe" investments in this economy. What can I invest in that will give me enough of a return to offset inflation, but that won't be too risky? I'm hoping to retire in the next ten years. Thanks!

Mary Malgoire: There is certainly a safe investment "strategy." Broad diversification. But you are right that there is no hiding from an occassional loss in a specific investment. Remember there's no free lunch in investing. Own many different asset classes. While some are declining others may be appreciating.

_______________________

Martha M. Hamilton: Mary, can you explain to me the change that will take place in 2010 regarding Roth IRAs? I think it allows more savers to take advantage of a Roth.

Mary Malgoire: This regards Roth conversions. The income limitation of $100K of Adjustable Gross Income will be remove in 2010, which means that anyone with any level of income can convert a traditional IRA to a Roth.

_______________________

Oviedo, Fla.: Should I roll over taxed accounts into "tax managed" accounts/funds like the ones at Vanguard? I currently pay capital gains tax and have interest income also. I note my index fund generates very little tax. I am in a very low bracket, however. I like the idea of money working for me but not generating dividends/capital gains. My child support is based on income and this investment gain makes me look better on paper than I feel I am. My state has no income tax, FYI. How can about $320k in T Rowe and Vanguard "regular" mutual funds be put to better use for me, tax-wise? I plan to leave this money alone until retirement in 17 years.

Mary Malgoire: More important than the tax issues is whether you have a diversified investment portfolio. This should include U.S., foreign, natural resources, real estate, fixed income and cash. But regarding the taxes, yes, index funds throw off little cap gains and so are good tax wise. You can own index funds in many of the asset classes I've mentioned above.

_______________________

Washington, D.C.: I've been hearing all of the many future economic scenarios, most of which seem designed to keep me scared and working until I'm 100. However, won't boomers soon start accessing tax-deferred retirements in large numbers? Will this produce tax income for the U.S.? I haven't heard anyone mention how or if this will effect the economy.

Mary Malgoire: Good for you for not buying into the fear mentality. Yes, we haven't heard much about the revenue that will be produced as boomers withdraw from IRAs, etc. But many will not withdraw until they are required to do so at age 70.5 so I don't expect a big change in the Fed deficit situation.

_______________________

Dupont Circle: I'm considering putting my meager savings into a high yield savings account like ING or ETrade. Any specific account suggestions or warnings before I do so?

Martha M. Hamilton: You might want to look at rates on online money market accounts at ING or Emigrant of Citibank. Once you have enough in savings to carry you through a few months in case of an emergency, you should consider investing in a retirement account either at work or on your own. When you do, you may want to look at a balanced fund or a target date fund which might provide more return on investment. Savings accounts, money market accounts, etc. with their relatively low yields may not keep you even with inflation

Mary Malgoire: I can't help you here. I would check with a rating system on the financial stability of ETrade and ING. Otherwise, if you feel good about the institution, stick with a diversified investment - a no load mutual fund such as the Vanguard Star fund or similar.

_______________________

Washington, D.C.: I'm 25. What should I be thinking and doing for retirement?

Martha M. Hamilton: You should get started on a retirement savings account now to benefit from the years of growth you have ahead of you. If you can invest through your employer and obtain a match for your savings, that's the place to start. If not, you may want to invest in a Roth IRA. With a Roth IRA, you pay taxes now but future growth is tax-free. At age 25, you're likely in a lower tax bracket now than you will be in the future, so now is the time to pay those taxes. Look for a low-cost mutual fund. An index fund or a broadbased equity fund will give you a broad investment in the market, which is better than investing in an individual stock. Or you might choose a fund that mixes stocks and bonds. Finra, an organization that regulates brokers, has good investor information and a mutual fund analyzer at its Web site. And the Securities and Exchange Commission also has good info, including a mutual fund cost calculator here.

Mary Malgoire: Ditto!

_______________________

Baltimore, Md.: Re: savings with ING and ETrade. I believe these online savings entities are FDIC insured, so there should not be a worry about solvency. (That is, like Countrywide, ETrade has established a federally insured savings bank.) I have been squirreling money away online in an HSBC Internet savings account. It now plays only 3.05 percent, but that's better than most short term CDs today.

Mary Malgoire: Thank you!

Martha M. Hamilton: True. They're not paying the rates they were a year ago, but it's still better than some.

_______________________

Washington D.C.: Hi,

I'm at the leading edge of the Gen-Xers (1965 vintage), and have (perhaps too pessimistically?) decided that Social Security isn't to be relied upon, and that what I can put in my 403(b) and Roth are likelier bets. Should I max out my 403(b) (I already get the maximum match), or fund my Roth? I don't have quite enough to do both.

Thanks!

Mary Malgoire: As long as you get the match from your employer on the 403(b), you should go ahead and start a Roth.

_______________________

Bethesda, Md.: Re the previous question about ING, etc.: I can't answer about eTrade, but ING is not only stable but also FDIC-insured. I have a savings acount and several CDs with ING. (ING has some non-insured mutual funds available too.) I also have some mutual funds and money market accounts (considered very safe, but not completely risk-free, and not insured) with Vanguard. I would recommend either institution, but you shouldn't conflate them -- these investments are for different purposes. If the earlier chatter is looking for safe, FDIC-insured accounts, then go with ING or Emigrant or a similar online bank.

Mary Malgoire: We should be clear that if equities, mutual funds, etc. are purchased, this is typically done through the "brokerage" section of ING. Such investments are held at the broker in street name and thus, are subject to the financial stability of the broker. Savings in the banking part would be considered FDIC insured.

_______________________

Cocoa Beach, Fla.: When scheduling withdrawals from an IRA is there any day in a month to maximize returns? I heard that deposits into IRAs are done on a particular day so what's the day after that?

Mary Malgoire: Mutual funds pay their dividends at various times during the year and on various dates during the month. Regardless of whether you made a withdrawal from your IRA, you would be credited eventually with the dividend distribution. So, I'm not aware of any benefit from timing the withdrawal to a particular day of the month.

_______________________

Silver Spring, Md.: I'm a 64 year old single woman and I don't have enough for retirement. I contribute to a 401k, but I have no pension. I don't know what else to do. Are there books specific to my problem? I feel like I will never be able to retire.

Mary Malgoire: We feel your pain, unfortunately you may have to work beyond 65. The best thing right now is to work for an organization that provides an opportunity to fund a retirement. Social Security should help.

Martha M. Hamilton: The longer you work and postpone taking Social Security, the more money you'll collect once you do take it. If you haven't already, take a look at the mailing Social Security sends you each year to see how much more income you can have by postponing claiming Social Security. I'm planning on waiting till 70, because Social Security is the only inflation-adjusted income I'll have in retirement, so I want that annual cost-of-living increase to be on the biggest base possible.

_______________________

NOVA - Retirement Investments: My husband and I have a combined income of $220,000. I am 27 and I currently contribute the maximum $15k/year to my 401k account (my company does not offer a match). My husband is 29 and contributes about $5k/year to his 401k, including his employer's maximum match. Our only debt are my $50k in graduate school loans for which I have a fixed interest rate of 2 percent. After expenses, we are able to save approximately $6k/month. We feel like we should be saving more for retirement. In fall 2009, however, we plan on selling our current condo and buying a bigger place. Is it smarter for us to (1) save our 2008-2009 cash for a 20% or greater down payment (2) increase my husband's 401k contribution or (3) keep his 401k contribution the same but make small investments in a traditional IRA and bonds at the end of the year?

Also, we currently have $60k cash saved for emergency expenses. What is the best vehicle to keep this money in? High interest savings account? Something else?

Mary Malgoire: You didn't say how much the downpayment is expected to be and what you might apply from selling your current home. My thought is to maximize husband's 401K contribution. Then, put away for the 20% down payment. When the time comes, if necessary, use a part of the emergency reserves for the down payment and replish ER going forward. Don't bother with #3.

Best vehicle for the reserves is a short term bond fund, rolling CDs (1-3 months), or a money market account.

_______________________

Martha M. Hamilton: Thanks for all the very good questions today, and many thanks to Mary Malgoire for knowing the answers. Join me again in two weeks to continue this conversation. You can also email me at hamiltonm@washpost.com.

_______________________

Editor's Note: washingtonpost.com moderators retain editorial control over Discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions. washingtonpost.com is not responsible for any content posted by third parties.