By Scott Burns

Q. We are in our early 70s. Should we put some of our 401(k) and other savings in silver coins and bars? This is based on the pending financial disaster in the U.S. and probably world-wide. We are thinking about investing $100,000. This is not to grow a big pile, but to protect the money for our offspring. Would this be the prudent thing to do? —T.A., Austin, TX

A. Inside your 401(k) you will not be able to buy silver coins and bars directly. The most common way to do that would be to buy shares of an exchange traded fund (ETF) that holds silver coins or bars. Even with the recent surge in silver prices, the case for it rising to a higher price remains strong. You can read more about this in a column I wrote about Shayne McGuire and his book, “Hard Money: Taking Gold to a Higher Investment Level” (Wiley, $35). Here’s a link to that column on my website: http://assetbuilder.com/5AVAY7

If we do have the kind of global financial disaster that many readers are anticipating, it is unlikely that a silver horde will do much for your kids. If disaster happens you won’t just be replacing your worthless dollars with a small bag of silver coins to buy the weeks’ groceries at the neighborhood Whole Foods while everyone else starves. Trust me; supermarkets won’t have food to sell.

And if they did have food to sell you could probably get into the store to buy food— but getting home with it would be a major problem. One hungry person with a gun could undo all of your careful preparation. A better bet would be a good supply of rice, beans and honey in your pantry as a disaster hedge— and lots of diversification for your investments.

Q. I have heard that banks from certain other countries offer CDs at much higher interest rate compared to CDs in U.S. dollars. For example, a CD in Australian dollars held in an Australian bank earns about 6.5 percent a year. This would require me to go through foreign banks which have the associated procedural hassles. I would prefer to do this through a US bank. I inquired at Bank of America, Chase, etc. but the people I talked to have not even heard of holding CDs in foreign currencies. Is this something offered by US banks at all? If so, how can it be done? I understand that there may be currency fluctuation risks. —K.P., by email

A. Everbank, an online domestic bank, has offered CDs in different currencies for many years. If you visit their website, www.everbank.com, you’ll see that you can invest in CDs denominated in the currency of a single country or in “baskets” of currencies. Recently, for instance, the yield on a 1 year CD in the Australian dollar was providing an APY of 3.63 percent. The same investment maturity based on the Euro was yielding only 0.13 percent. The yield on their 6 month CD in a basket of commodity-strong currencies (Australia, Canada, New Zeeland, and South Africa) was 1.70 percent.

Q. My Husband and I are both 85 years old. We live in an independent living facility. We have a net worth of $2.25 million. Our pension income is $42,000. We have investment income from a variety of stocks, bonds and mutual funds of about $75,000. Our annual expenses run about $70,000. We have no debt. I have $275,000 in an IRA annuity with a guaranteed 3.4 percent yield. It matures next month.

The insurance company is offering to extend it up to age 99. I feel an annuity is not the most suitable place for an IRA and I'm fearful of hyper-inflation in the coming years. Nevertheless I'm inclined to go for the extension. What would you suggest?— L. M., Austin, TX

A. Assuming this is a plain, interest bearing annuity contract, the yield is mildly attractive. Recently, for instance, a ten-year Treasury was yielding 3.31 percent and a 20 year Treasury was yielding 4.14 percent. So this offer is similar to Treasury yields.

Since you are both elderly, however, it will be really important to understand the terms of the contract and how much you can take out, without penalty, between now and age 99. Remember, since the money is already in an IRA, you could invest the money in Treasury obligations and the yield would still be tax-deferred. As a practical matter, tax-deferral is a non-issue because your Required Minimum Distributions are greater than the yield.