Q: I will soon have about $74,000 from the sale of my 90-year-old mother’s house. The house is in an irrevocable trust, and I am the trustee. My mother recently moved to an assisted-living facility and does not need any additional income from the house sale proceeds.

I am looking at investing the funds in either USAA or Vanguard, perhaps half in a balanced fund, and the other half in growth. Do you have any opinions or experience with USAA vs. Vanguard funds? — M.C., by email

A: If the issue had only one dimension, expense, the choice would be clear: Vanguard. Vanguard is an ongoing challenge to all its financial service competitors because it sets the standard for low costs. That said, I have never heard anything but praise for USAA from its members. The loyalty of USAA members is striking. That tells me it must be doing a lot of things right.

To keep things simple, here are two funds to consider and their respective figures.

USAA Cornerstone fund (ticker: USCRX) is classified as a “moderate allocation” fund but holds 32 percent of its portfolio in foreign stocks, according to Morningstar, the Chicago fund data firm. Its return over the five years ending 12/31/2006 was 8.74 percent, and its expense ratio is 1.17 percent. Vanguard Wellington fund (ticker: VWELX) has the same classification and also holds some foreign stocks. Its return over the same time period was 8.94 percent, and its expense ratio was 0.31 percent. Both funds are reasonable choices for a “one-stop shopping” portfolio.

Another choice, if you prefer the USAA umbrella, is to have a brokerage account at USAA and use it to build a Couch Potato Building Block portfolio. A simple Margarita portfolio, for instance, would include equal investments in the iShares TIPS exchange-traded fund (ETF) for fixed-income (ticker: TIP), the Vanguard Total Market ETF (ticker: TSM) for U.S. equities and the Vanguard All World-ex US ETF (ticker: VEU). With expense ratios of 20, 7 and 25 basis points (there are 100 basis points in 1 percentage point), respectively, your portfolio would have an average expense ratio of 0.17 percent.

That would give it an expense advantage of 1 percentage point a year over the USAA Cornerstone fund.

Q: I am puzzled by something in a recent column. In answer to one question, you state that these days a safe investment pays only 5 percent. In answer to the next question, however, you talked about a 9 percent return on the person’s money. Sorry, I do not understand. Would you explain? — G.M., Boston

A: A safe return is one that is certain, like the yield on a short-term CD or Treasury obligation. If you are willing to accept some uncertainty — and assume some risk of loss — it is possible to achieve a higher return. The long-term return on large common stocks, for instance, is nearly 11 percent. This figure includes reinvested dividends and capital gains. Unlike interest payments posted to a savings account, however, this return varies from year to year. Worse, you can also have years when the value of your investment declines.

One way to reduce (but not eliminate) the uncertainty of the return on common stocks is to build a portfolio that contains both equities and fixed-income investments. A portfolio that was 70 percent equities and 30 percent fixed-income, for instance, could be expected to return about 9 percent. The return would vary from year to year and it would still be possible to have a losing year, but the long-term return — say 10 or 15 years — would very likely be about 9 percent.

Why take the risk?

Simple. It takes about 15 years to double your money if your return is only 5 percent. Raise the return to 9 percent, and your money will double in only eight years and will nearly quadruple in 15 years.

Q: I am 67 and retired. My retirement funding is from Social Security, and 100 percent of my nest egg is in five equity funds, from which I make periodic withdrawals. I’ve often heard that as one gets older, more funds should be shifted to bonds. Is this still true after retirement? — H.W., Addison, Texas

A: In general, yes. The fine-tuned answer depends on your appetite for risk, your age and your need for income. Some retirees are quite happy living on their Social Security, supplemented with small withdrawals from their savings. Retirees in that position can afford to take more risk because they are not depending on their savings for a regular flow of income. The more essential cash from your portfolio is to your day-to-day well-being, the greater the attention you need to pay to risk.

This means making certain that your portfolio has genuine diversification and a higher commitment to relatively short-term fixed-income holdings. One good measure is to ask how long you could pay your ongoing bills, after Social Security benefits and pension income (if any) with money you have in cash, savings accounts and short-term fixed-income mutual funds. If the answer is less than two or three years, you should probably increase your fixed-income investments.

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Personal finance writer Scott Burns is syndicated by Universal Press. His twice weekly column appears in newspapers from Boston to Seattle. He is the Chief Investment Strategist for AssetBuilder, Inc. Readers can register at www.scottburns.com. Questions/comments can be posted directly. They can also be sent, without registration, to scott@scottburns.com. Questions of general interest will be answered in future columns and on this blog.