Q. For reasons I won't go into here, we recently purchased a second home by taking out a 30-year, $250,000 home equity loan on our primary residence. My instinct was to repay this loan as quickly as possible. But now I am wondering whether we should invest our surplus income (about $750 a month) and just make the required loan payments. Or possibly do a combination of both.

I am 69. My husband is 67. He retired four years ago on disability. In addition to his Social Security and about six more months of long-term disability insurance payments, we have my pension, my Social Security (currently 1/2 of his, but this will double when I turn 70 and start taking my own), and my salary from working half time. We have about one million dollars, mostly in tax-deferred investments. We also have about $200,000 in cash. We will rent the second home (for now) but the rent won’t cover taxes and other expenses.

How should we invest our extra cash--- or should we just pay down the home equity loan? —M.K., Austin, TX

A. Some people can benefit from debt. They generally have strong stomachs and a very high net worth. Because of their high net worth they can view having a mortgage as a modest and low-cost form of leverage on their over-all portfolio. Currently, the cost of both first mortgages and home equity loans is below 4 percent for borrowers with good credit.

This compares well with typical brokerage house margin debt (loans against securities). The current cost of a $250,000 margin loan at Schwab, for instance, is 6.75 percent. Smaller loans cost more, up to 8.5 percent for loans under $25,000. According to their websites, a comparable debt at Fidelity would cost 6.575 percent; at Merrill Lynch it would be 6.375 percent.

Most people become uneasy about debt as they get older and enter retirement. Actually, “uneasy” is an understatement. I think many people become phobic about debt when they are older. Given your ages, paying down debt as rapidly as possible will probably be a really good choice.

You might also visit a Social Security office and double check on what your future Social Security benefits will be. The strategy you have used is being limited, for future retirees, by recent changes in benefit claiming rules.

Q. My wife and I are in our mid 70’s. We are fortunate to be able to pay normal living expenses from pensions and Social Security. Our portfolio is all at Fidelity and managed by their “Portfolio Advisory Service.” We have about $3.2 million invested and pay annual fees of $16,000.

I have difficulty seeing what value we are getting for this large expense as the portfolio pretty much tracks the benchmarks less one-half of one percent to one percent. Fidelity also uses external financial advisors “Wealth Advisor Solutions” that may provide better returns.

To reduce expenses (and hopefully improve performance) we are considering dividing our portfolio three ways: Couch Potato Index, external adviser, and the Portfolio Advisory Service.

How do we decide what is best? We have a Fidelity office nearby. It is important for the personal contact and guidance for my wife in the event she survives me. —B.C., by email

A. Dividing your money three ways will only complicate your life. Worse, it will open your wife to suggestions that may be harmful when you are no longer around. Rather than get outside managers you might consider creating a single competing alternative to Portfolio Advisory Service. The alternative could be a balanced fund that is managed by Fidelity, such as Puritan Fund (ticker: FPURX). This fund requires a minimum investment of $2,500. It ranked in the top 11 percent, or better, in its category over the last year, 3 years, 5 years, 10 years and 15 years.

Since your investment would be well over $10,000, you can buy Fidelity Puritan K Fund (ticker: FPUKX). It’s the same fund, but with a lower expense ratio of 0.46 percent. This will keep your money in Fidelity, but allow you to shift to lower costs if their Portfolio Advisory Service disappoints significantly.

Note that going to a single fund for the part of your portfolio that isn’t with Portfolio Advisory Service will reduce some tax management possibilities. Tax management, however, is a (possible) gain in efficiency at the cost of greater complexity.