Q. We are a retired couple in our mid-70s, living on a fixed income of $26,000 and other income of $3,000 a year. We expect to inherit approximately $60,000, and would like to invest $50,000 of this to supplement our pension. We have a low tolerance for risk. How do you suggest we invest this?

L.B., Woburn

A. For people in your situation I usually suggest a solid Ginnie Mae fund, which makes a good long-term investment and can be expected to provide a solid income stream, currently running at about 6.9 percent.

But while Ginnie Mae funds do provide a solid income stream, and while the best ones tend to hold their value over the long haul, the ride can be very bumpy.

In fact, you can expect them to lose money in about two years of every decade, if the past record is an indicator. That record also shows they eventually recoup those losses, but if you're the kind of person who would panic if a $50,000 investment lost $4,500 after 12 months -- basing the figure on a 2 percent loss, compounded by withdrawal of a 7 percent yield -- they are not for you. If you want to study up on them, the fund I use myself is the Vanguard GNMA.

However, you'd probably be happier with something that not only bears no risk, but also provides a tax advantage: US Treasury bills, notes, or bonds. Entering this week, the two-year US Treasury note carried a 5.68 percent yield.

It's less than the GNMA yield, but if you bought a GNMA fund the yield would be taxable on both your federal and state income tax returns. But the interest on US debt obligations is free of Massachusetts tax, so this would close the gap slightly.

Specifically, at the current yield you might expect a $50,000 investment in the Vanguard fund to provide a $3,465 income stream -- but it would be taxable as interest income in Massachusetts, so $340 would disappear on April 15, leaving you with $3,125.

At current rates, the two-year Treasury note would provide $2,840 of annual income, entirely tax-free on the state return. Thus, the spread in yield actually works out to $285 rather than $625.

Q. I'm 34 and my husband is 36. I stay at home with our two boys, one 4 years old and one 7 months old. My husband is in the US Navy, and has 10 years to go until retirement. Since we paid cash for our car, we have an extra $300 to $400 per month that we can invest. My husband is quite resistant to an IRA because the older of the kids will start college in 14 years and he doesn't want to pay a penalty if we need to withdraw for educational expenses. We have $2,000 in Janus fund, the same amount in Neuberger and Berman Guardian, and $3,400 in Acorn fund. We have been adding $100 a month to the Acorn fund account, and buying $100 worth of US Savings Bonds each month. I am thinking of lumping the Guardian and Janus accounts together and start adding $200 a month to the combined account. What do you suggest?

M.M., San Diego

A. Since all of these are excellent funds, and since you probably have a potential capital gain liability in Neuberger and Berman Guardian and/or Janus, I don't see much argument for combining the accounts.

Why not simply select one and direct the lion's share of your ongoing savings there? My choice would be Guardian, based on the value orientation of the portfolio. But let's back into the question of how much should go there each month.

First, I suggest you stick with the contributions to Acorn. As a small-cap growth fund, it represents a diversification of the portfolio away from the two large-cap funds.

Second, explain the new Education IRA to your husband. These accounts, which are effective next year, allow people who meet income requirements (which phase out between $95,000 and $110,000 for individuals and $150,000 and $160,000 for couples) to contribute $500 a year.

The beneficiary of these funds must be designated, and tax-free withdrawals are allowed if the money is used for qualified post-secondary educational expenses -- tuition, room and board, books, and so forth. Tax liabilities are incurred only if the money is withdrawn and used for other purposes. A 10 percent penalty is also levied.

However, either an entire account or the unused balance in an Education IRA may be rolled over into a family member's Education IRA. The accounts must either be liquidated or rolled over by the time the beneficiary reaches age 30.

There is no tax deduction for the Education IRA contributions. While anybody can start an Educational IRA for a child, the aggregate of all contributions to one person's account cannot exceed $500 a year.

I suggest you pitch this idea to your husband, and begin contributing the maximum allowed each year for each child, putting the investments in a large-cap index fund such as Fidelity Spartan Market Index.

If you decide you can save $400 a month, you would have a little more than $216 a month to add to Guardian or Janus; if you settle on the $300 level, the monthly contributions would be $116.

One final thought: Once you have persuaded your husband of the virtues of the Education IRA, start banging away on the idea of a traditional IRA for your retirement.

Q. Can you tell me what the $58,634 in my 401(k) plan will be worth in 30 years? I have $49,810 of this invested in Fidelity Spartan U.S. Equity, and the balance in my company's stock. I am 30 years old, and plan to contribute to the program for another two years, during which I will add $4,000 to the mutual fund and buy another $2,000 worth of the company stock. After that, I will start a new career, and will not have a 401(k) benefit. Can you tell me how you determine the answer?

S.E., Waltham

A. I can't tell you what your 401(k) will be worth in 30 years, but I can make a projection: $861,511. That may sound pretty precise, but it's really just a computer turning some pretty rough estimates into some very precise-sounding numbers. Here's what I assumed to get that answer.

Because I'm bearish on the stock markets, I projected no internal growth from either your stock fund or the company stock during the next 24 months, meaning that the account would simply advance from the current $58,634 to $64,634 based on your ongoing contributions.

For the remaining 28 years, I assumed 10 percent average annual growth. The precise answer you get from a computer program is based on a number settings you have made. When people are making payments into an IRA or a 401(k) program, I usually presume 12 equal payments, made at the end of each month of the year.

I then set the computer to compound the income earned on an annual basis, and to use the actual number of days involved rather than assuming 12 months of 30 days each. You can get different numbers by changing the settings: The most dramatic difference comes if you change from annual compounding to monthly compounding.

Changing from payments in arrears to payments in advance, or from actual days to presumed 30-day months, makes little substantial difference over the course of a long investment program.

You can make a lot of arguments about these settings. I have two thoughts on these arguments. First, I use the compounding settings that produce the more conservative result. Second, and more important, you have to remember that these numbers are only ballpark figures, probably best viewed as having a margin of error of roughly 10 percent.

I do these calculations using a program called Interest Vision Special Edition, available free on the Web from Parsons Technologies (http://www.parsonstech.com). A few months ago I bought the ``professional version'' of the same program, but found it provides no substantial advantage over the freebie.