Q. I am a 49-year-old engineer working at a large consulting firm. Our company has a high percentage of highly compensated employees and has limited pre tax contributions to 9 percent of gross income. In my case, this is $4,000 short of the allowable annual pretax limit of $15,500. They include Roth contributions in this limit, so my tax-friendly options through my employer are maxed-out. Do I have other options to reach my pretax limit? ---B.R., by email

A. Sorry, you don't have other options for pre tax saving. But the result may not be as bad as you think. One thing you can do is to concentrate extra savings dollars on debt reduction. Another is to build a cash fund to handle future credit purchases. Still another thing you can do is to build your taxable investment account with tax-efficient investments.

I'm sure you'd rather cut your current taxes. But if you look ahead, a well-funded taxable account will allow you to (1) avoid making withdrawals from your qualified plans until absolutely necessary, age 70 1/2 and (2) consider deferring taking Social Security benefits. Both steps may work to reduce your lifetime taxes.

The appeal of qualified plans is rooted in the idea avoiding high tax rates now, and enjoying lower tax rates later. That's what everyone assumes about retirement --- a lower tax bracket.

The taxation of Social Security benefits, which began in 1983, changed all that. Taxing the benefits makes it likely that successful savers will pay taxes at higher rates on their qualified plan withdrawals.

As someone earning over the Social Security wage base maximum ($97,500 for 2007), you will receive maximum Social Security benefits of about $42,000 if you retire at age 67 (the figure assumes a 3 percent annual inflation rate). As a consequence, you'll start paying taxes on Social Security benefits after a very small amount of qualified plan withdrawals. Your effective marginal tax rate will be 22.5 percent on the first $12,000 of benefits taxed and 46.25 percent on the remainder. Your current tax rate is 28 percent, if single, and 25 percent, if married.

Q. Your column is usually lukewarm about annuities. What do you think of charitable gift annuities, whereby you sign a contract with a non profit organization to get a lifetime income in exchange for a gift of principal? ---K.V., by email from Cambridge, MA

A. One problem with discussing annuities is that a single word covers all varieties of contracts--- and the variety of contracts is growing faster than theories about the late Anna Nicole Smith.

Charitable gift annuities are a very interesting option, particularly for older retirees. They provide an immediate tax deduction that is reduced by your life expectancy and a reasonable lifetime income. If the charity is well-financed---- such as a large college endowment--- and your intention is to give to that institution upon your death, you can have income while you are living and enjoy the pleasure of having given while still living. Please don't read this as a blanket endorsement of charitable gift annuities----before you commit you should have the annuity reviewed by a fee-only financial planner.

I think immediate life annuities have a role in retirement and financial planning, particularly for people who don't have pensions when they retire. I also believe that tax-deferred fixed annuities can be useful if you are very careful about the terms and duration of the contract. The annuity products that I have yet to find useful are tax-deferred variable annuities, which have self-defeating high expenses, and equity index annuities, another oversold and costly insurance product.

Q. Could you tell me roughly what current income I could expect, per $100,000, for a lifetime annuity with last survivor benefit - husband 73, wife 69. I've been considering putting a part of my portfolio into a lifetime annuity. ---W.N., by email from Cotuit, MA

A. I went to www.immediateannuities.com and found that a joint survivor annuity with 100 percent of the original annuity amount going to the survivor would receive $608 a month in income for a $100,000 commitment. That's $7,298 a year, or 7.3 percent of the original investment. A portion of that amount would be considered tax-free return of original principal. This is a guideline, or ballpark, figure. Different insurance companies will provide somewhat different levels of income, and it is important to consider the credit quality of the company offering the life annuity. Life annuities are available with different terms. The same annuity with lifetime benefits to the older male only, for instance, would be $854 a month, or $10,248 a year. The longer the life expectancy is, the lower the monthly income.