Q. I have had several discussions with my financial adviser/broker about fund fees. He tells me that my Legg Mason funds are not high-expense funds - they run between 1.6 and 2 percent. I tell him that this seems excessive in light of current market conditions and the risk/returns of most of the Legg Mason funds. How can I counter his argument, and should I look at index funds that average about 0.5 percent in fees? --- B. M., by email

A. Your broker has yet to educate himself on the cost of mutual funds. This information can be acquired through the use of a mutual fund database such as Morningstar Principia, which is readily available to all investors and brokers. Legg Mason funds, as a group, are not highly expensive for the distribution channel they use. Quite a few of their funds are "C" shares. This means they have a 12b-1 charge of about 1 percent a year. This charge is in addition to the underlying expense ratio of the fund. It's pretty easy to get total costs of 2 percent or more when your primary means of distribution is "C" shares or "B" shares.

There are brokers, however, who watch out for their clients--- while getting paid--- by focusing on front-end-load "A" shares of funds with low ongoing expenses. The client pays for portfolio-building advice, but has low expenses after the initial commission "hit." Since commission schedules are scaled, with lower commission rates being paid on larger and larger investments, many people approaching retirement can roll their 401(k) plan assets into a mutual fund family for relatively small "A" share commissions and low ongoing costs.

Here's the difference. Your ongoing costs are 1.6 to 2 percent a year. That's a serious drain on your return on your money. It is, for instance, more than 50 percent of the actual dividend and interest income your portfolio probably produces. An alternative is to pay commissions to start, followed by low expense ratios. The American Funds family, for instance, has typical expense ratios for its "A" shares of 0.60 to 0.80 percent. The difference will pay for the upfront commissions pretty quickly.

How a fund is distributed--- when, how and if someone is paid--- has a major impact on the cost of investing. For moderate allocation funds (usually called balanced funds), the average annual expense of a deferred-load fund is 1.96 percent. The average front-end-load fund costs 1.30 percent. The average true no-load fund costs 1.07 percent. And the average index-based moderate allocation fund costs 0.84 percent. Focus on low-cost managed or index funds and you can reduce your total ongoing cost of investing to 0.60 percent. Or even more to less than 0.20 percent to 0.25 percent if you self-manage your money. The difference is your money, in your pocket--- if you do the necessary learning.

Q. I am a senior and a widow. I was 66 on Jan. 2. I am still working full time and hope to continue for a few more years. When I applied for Medicare last year, a representative at the Social Security office told me that when I reach my 66th birthday I can start collecting on my husband’s Social Security (my late husband retired at 55 due to illness). Later, when I stop working, I can collect on my own work record. This way the amount that I collect later will be higher, because I am working longer. Please let me know if it is the right thing to do. ----B. K., by email, from Houston, TX

A. That was a good suggestion in an unusual situation. Basically you have a choice of whose work record to claim under. You are free to take Social Security from the work record that would provide the highest benefits. So you can claim under your late husband’s record now, with a good shot at receiving a higher benefit under your own record later. Of course, each year you delay taking benefits while working, your work record gets better and your ultimate benefit increases.