Tax Deferred

So, how should you proceed in this market?Don't panic. And don't follow the crowd; the crowd is often wrong.Look for buying opportunities, especially depressed high-tech issues.If you seek income in this bear market, ask your broker about Duff & Phelps Utilities Income Fund. It trades on the New York bTC Stock Exchange, pays a high dividend and mails you a monthly check.Stick to quality in a bear market. If Merck & Co. Inc. stock drops 20 points, you still own a top-grade pharmaceutical issue.

"You can own as many IRAs as you want," says Tax Hotline, "and it is a good idea to have several. Having multiple IRAs keeps funds locked up longer - to earn more tax-deferred returns, meet family goals, reduce estate taxes and attain other valuable objectives. Multiple IRAs also allow more flexibility in managing tax-deferred assets. For example, each IRA can have different beneficiaries, and you can transfer funds between IRAs without paying taxes until age 70 1/2 ." WALL ST. WATCH: "There is a new appetite for U.S. Treasury bonds.

EVEN STOCKS IN defunct companies can have value, says John Markese, president of the American Association of Individual Investors. "You have a tax loss based on what you originally paid," he points out. "Know the date when the stock became worthless to establish your loss. Also, think through what you can learn from having owned the stock. Why did you buy it in the first place? What went wrong? Why didn't you sell before it lost value? Use the answers to make better investments in the future."

I GOT A letter from a familiar address -- Niagara Falls, N.Y., the place where I grew up. The question it asked could have come from anywhere today. "A financial planner thinks I should buy a tax-deferred variable annuity. What do you think?"Salespeople are selling annuities to anyone who breathes. The reason is simple. They earn big commissions, in the 5 percent to 7 percent range.You don't notice this commission because it's not deducted up front. In fact, the annuity brochure may boast, "No initial sales charge."

Q: I am currently a resident of Florida and only use my Maryland house for a few months each summer. I will be facing capital gains tax at some point in the future when I sell my Maryland house. I know that with investment property, you can arrange a sale so that the capital gains can be deferred if you put the proceeds into another investment property of equal or higher value. However, my Maryland property is a second home, not an investment property. Would it be possible to sell my second home, put the money into an investment property and defer the capital gains?

EVEN IF you do not have a 401(k) plan -- the tax-deferred retirement program most experts say is almost impossible to beat -- you can still build a hefty, tax-deferred nest egg for retirement.And if you don't have a 401(k) with its menu of stocks and mutual funds -- wherein contributions are often matched by employers -- don't think you are alone. Working Woman magazine, May, says 40 percent of working men and women do not enjoy the 401(k) break.But cheer up. One excellent substitute for a 401(k)

Do you need money to buy a house, furniture or a major appliance? Some senators say you should be allowed to tap your tax-deferred retirement plans to pay for such purchases.A bill to that effect was proposed Tuesday by Sen. Arlen Specter, R-Pa., and Sen. Pete V. Domenici, R-N.M. If approved, taxpayers would be permitted to withdraw up to $10,000 from their Individual Retirement Accounts (IRAs), 401(k) plans and Keogh plans as long as the money was used for one of the designated purposes.

As the fourth quarter begins, where should you invest your money? It's a no-brainer, really. Your best bet -- even if means tightening your belt some -- is to maximize contributions to a 401 (k) plan where you work.A recent survey revealed shocking results: 40 percent of eligible PTC working men and women do not have a 401(k).Who can have such a plan? What are its benefits?Employees who are 21 with over one year of service are eligible. Once your plan is established, you may defer up to 15 percent of your compensation to a maximum of $9,500.

New York -- Chalk up one more casualty of the recession: Employees are stashing less money in their company's tax-deferred retirement-savings plans.The average participating worker put only 4.9 percent of salary into his or her plan last year, down from 5.2 percent two years ago. That's according to a recent survey of 1,518 firms by MassMutual Pension Management in Springfield, Mass.These retirement plans, technically known as 401(k)s, are now offered by most large employers and about half of the smaller ones, MassMutual reports.

Kevin, of Towson, is building his retirement nest egg and trying to decide between two investment options. The 28-year-old has a tax-deferred retirement plan at work, but there's no employer match. He has been advised to put his money into a Roth IRA. But he wonders whether the Roth is worthwhile if he's able to contribute money for only a few years before his rising income makes him ineligible. What if he has, say, $10,000 in the Roth and then no longer can contribute? "Although I won't be taxed on whatever that compounds to when I'm 60, it doesn't seem like it would be worth it," he e-mailed.